Relatively staid Greek shipper Tsakos Energy Navigation (NYSE:TNP) just reported glamour-stock results. First-quarter revenue was up 43% and net income jumped 85%. Based on analyst estimates for 2004, the stock is trading at a rock-bottom 6.3 times forward earnings.

Tsakos and competitors Stelmar Shipping (NYSE:SJH), Teekay Shipping (NYSE:TK), and Frontline (NYSE:FRO) are all being buoyed by a lack of capacity. Rates are so high, in fact, that Tsakos' operating cash flow per ship, per day, is up 33% from last year. Rates should stay high as long as worldwide oil demand keeps growing 2% a year and oil inventories stay low.

The fear of overcapacity, the bane of the shippers in the past, should remain muted for years. There is limited shipyard capacity to produce new ships. Regulators, who have been trying for years to force older ships into retirement, are being helped by an unexpected event -- unusually high scrap metal prices. In a word, the business climate for shipping companies is "marvelous."

With every investment, there are shoals to navigate. For Tsakos, that would be $475 million in debt. The upside is that this debt produced a fleet of ships with an average age of 7.1 years compared to an average 12.8 years for the world's tankers. The company plans to grow further, from today's 28 vessels to 41 in 2007, but as long as earnings are sufficient to allow debt-to-equity levels to at least stay level, investors should not be concerned.

Old-economy investors can and do argue that oil stocks like BP (NYSE:BP) and ChevronTexaco (NYSE:CVX) are cheap. Think, though, what Tsakos offers. Its earnings are tied to tight shipping capacity that should last for years -- not the price of oil, which could fall tomorrow. What's more, the stock sells for half the earnings multiple of integrated oil companies.

Did I mention that its 4% dividend is enough to make any Motley Fool Income Investor cry with joy?

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Fool contributor W.D. Crotty owns stock in ChevronTexaco.