Teekay Tankers' Shares Sank in 2011

As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Teekay Tankers (NYSE: TNK  ) . With oil prices relatively high, you'd think that any company that makes money from delivering that highly prized product would do well. But falling energy demand in the U.S. combined with too many tanker ships made things tough for the industry in 2011. Below, I'll take a closer look at the events that moved shares of Teekay Tankers this year.

Stats on Teekay Tankers

2011 YTD Return (67.8%)
Market Cap $220 million
1-Year Revenue Growth (29.4%)
1-Year Earnings Growth NM (net loss of $0.8 million)
Dividend Yield 16.9%
Cash / Debt $14.1 million / $374 million
CAPS Rating (out of 5) ****

Sources: S&P Capital IQ and Motley Fool CAPS. NM = not meaningful.

Why did Teekay Tankers go down this year?
Teekay Tankers owns a fleet of 15 oil tankers, including six Suezmax and nine Aframax vessels. The company splits its exposure to the current tanker pricing environment, keeping some of its ships under long-term contracts, while leaving others available for employment in the spot market.

But Teekay Tankers is far from the only participant in this crowded industry. Nordic American Tankers (NYSE: NAT  ) has built out an even larger fleet in recent years, while Overseas Shipholding Group (NYSE: OSG  ) and Ship Finance International (NYSE: SFL  ) also have a big presence in tanker shipping.

Bad news from competitor Frontline (NYSE: FRO  ) scared investors throughout the industry when it said it would need to raise more cash in order to keep operating through next year. There's good reason to think that Frontline will survive, but the company's woes are another good example of how hard it is in the tanker space right now.

The big question going forward is whether Teekay Tankers will be able to maintain its huge dividend. The weak environment has punished revenue and earnings, leaving it less able to sustain its payout. But with the stock trading as though failure were imminent, any turnaround in the industry could push up shares quickly, reducing the yield even if the company keeps the same payout rate. For now, investors seem pessimistic about Teekay Tankers' chances.

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Click here to add Teekay Tankers to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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