SFL Corporation Ltd (SFL)

FairStock Score: 40/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Two-minute take: I look for a durable business bought at a sensible price. SFL is a maritime and offshore asset lessor: it owns vessels and rigs and charters them out. The model can produce contracted cash flow, but it is capital-intensive, cyclical, and dependent on credit and counterparties. In the second quarter of 2026, revenue was $193.5 million and net income $33.8 million, a 17.46% margin. That is respectable, yet FairStock's trailing figures show return on equity of 6.25% and return on capital employed of 3.38%, modest for a leveraged balance sheet. Debt-to-equity is 2.30, and the Altman Z-Score of 0.32 is weak; I want a larger margin of safety when debt is high. On the positive side, trailing free cash flow is $217.8 million, a 15.2% FCF yield, and the dividend yield is 6.46%. Piotroski F-Score is 8/9, suggesting improving fundamentals. Growth is uneven: revenue growth is 3.16%, while profit growth of 999% is unlikely to repeat. Valuation is the rub. At the $13.58 close on 2026-10-13, FairStock calculates P/E 56.58, P/B 1.82, and a Graham Number of $6.35, giving a margin of safety of -113.86%. EV/EBITDA is 8.10 and PEG is 0.06, but the latter rests on that extraordinary profit growth. SFL may be an asset play with high current cash generation, but it lacks the durable moat and balance-sheet strength I prefer. The price does not offer a Graham-style bargain.

In plain English: SFL owns ships and offshore equipment and rents them out, mostly on medium- or long-term contracts. The business is profitable and generates significant cash, but it carries heavy debt and earns modest returns on its assets. At the recent price, the shares look expensive compared with profits and the accounting value of its assets, even though it pays a large dividend.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer