As global demand for reliable and affordable energy continues to rise, liquefied natural gas transporter Flex LNG has extended its partnership with LNG producer and exporter Cheniere Energy. That has FLNG stock pumping up a new buy zone as Cheniere energizes a potential buy point of its own.
Flex LNG's Oil & Gas-Transportation/Pipeline industry group ranks a strong No. 12 among the 197 groups IBD tracks. Highlighting that strength, four stocks in the oil & gas group, including EnLink Midstream and MPLX, sport the highest-possible 99 Composite Rating.
Flex LNG scores a 97 Composite Rating, meaning it's outpacing 97% of all stocks in terms of key stock-picking factors. It has also fueled a spot on the IBD Breakout Stocks Index, which gets updated weekly.
In the same industry group, Cheniere continues to show impressive technical action in its stock chart. But while sales growth has been explosive, years of red ink give LNG stock a lackluster 68 Composite Rating in Stock Checkup.
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Flex LNG Extends Deal With Cheniere Energy
With headquarters in Bermuda, Flex is a LNG shipping company with a fleet of thirteen fuel-efficient, 5th generation LNG carriers.
According to BP analysis, natural gas will overtake both crude oil and coal as the biggest fossil fuel in the 2030s due to its cleaner properties and features. LNG supplies have more than doubled over the last 10 years, with further increases expected. In 2050, global energy demand is estimated to be twice as large as in 2000, driving increasing calls for LNG.
On Nov. 23, Flex LNG announced an extension of its Time Charter Agreements with Cheniere Marketing International. The extension covers the three LNG carriers Flex Endeavour, Flex Ranger and Flex Vigilant. Prior to this addendum, the ships had about 6 years in aggregate remaining on the charter periods. The new arrangement extends operations for up to an additional 19 years in aggregate.
Flex LNG Among Top Dividend Stocks To Watch
Over the last three years, Flex LNG has generated average annual earnings growth of 281%.
But EPS gains have slowed and become more sporadic in recent quarters. Analysts now expect a 29% slowdown in earnings growth this quarter but a 23% increase for the full year.
Flex LNG earns a spot among the best dividend stocks to watch, with an impressive 8.1% yield on an annualized basis.
FLNG Stock Enters Buy Zone
After finding support at its 21-day and 10-day moving averages, Flex LNG cleared a 37.09 buy point on Nov. 23 after announcing the Cheniere deal.
Although it slipped below that entry in subsequent days, the stock has bounced back into the buy zone.
The relative strength line is just shy of a 52-week high. On the weekly chart, the RS line has been trending steadily upward since the stock hit a low in the summer of 2020.
Look for Flex LNG to continue to rise within the buy zone in heavy trade.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
