Improving Cash Flow Visibility Supports Dividend Bump. Increasing PT to $14 (from $12)

Research evidence excerpt

Improving Cash Flow Visibility Supports Dividend Bump. Increasing PT to $14 (from $12)

Investment Thesis

SFL is an asset owner primarily focused on the maritime sector that looks to lease out its assets on long-term contracts that should

provide cash flow visibility. The company seeks to generate shareholder returns primarily through returning cash to shareholders as

dividends. The company currently pays a quarterly dividend of $0.20. We expect the company to continue to focus on maintaining

balance sheet flexibility as it looks for accretive growth acquisitions and returns cash to shareholders as dividends.MARITIME

Upcoming Catalysts Price PerformanceEQUITY ■ Improving rate market for its tanker and rig assets should lead to price appreciation, $13

which should provide the company with additional balance sheet flexibility. $12

■ Potential acquisitions backed by long-term charters. $11

■ Stronger-than-expected rate environment on vessels that have profit-sharing $10

contracts which result in better-than-expected cash flows.

$9 ■ Dividend growth (longer-term catalyst).

$8RESEARCH

Base Case Assumptions: $14 Price Target $7

$6

Our base case assumption is that SFL will continue to trade as a high-yield income stock Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 at a dividend yield in line with its long-term historical average range of 7%-11%.

SFL

S&P 500 (rebased)

Source: FactSet

Company Description

Upside Scenario SFL Corp. Ltd. engages in the ownership

Our upside scenario assumes that SFL increases the quarterly dividend at a faster than and operation of vessels and offshore

expected pace on the back of an improving market and that the dividend yield trades related assets. It also involves in the