TEN

We rate TSAKOS ENERGY NAVIGATION LTD (TEN) as a Buy with a composite score of 70.8/100 at a current price of $32.81. The stock scores above average across the majority of our six quantitative factors and ranks #80 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (84th percentile) and momentum (82th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (36th percentile) and stability (50th percentile) tempers our overall conviction. We assign a Narrow Moat rating (44/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

TSAKOS ENERGY NAVIGATION LTD holds an above-average position (#18 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 70.8/100 places it at rank #80 in our full 7,333-stock universe. At $512M in market capitalization, TSAKOS ENERGY NAVIGATION LTD is a small-cap player in the Transportation, Communications, Electric, Gas, And Sanitary Services space, which limits certain scale advantages but may allow for more agile strategic execution.

Despite positive momentum (82th percentile), revenue contraction of -10% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 98% (+42.6pp vs sector) narrow to operating margins of 35% (+17.1pp vs sector) and net margins of 22.6%, yielding a gross-to-net conversion rate of 23%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $32.81, TSAKOS ENERGY NAVIGATION LTD appears undervalued relative to its fundamentals. Our value factor score of 84/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 6.3x (a 63% discount to the sector median of 16.9x), EV/EBITDA of 1.4x (discounted to peers), P/B of 0.5x, P/S of 0.3x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to TSAKOS ENERGY NAVIGATION LTD. The stock presents a balanced risk profile: significant leverage (103% debt-to-equity). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (103% debt-to-equity). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 50th percentile and quality factor at the 71th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 98% provide a buffer against cost pressures; a 8.65% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate TSAKOS ENERGY NAVIGATION LTD's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 42.0%, a 8.65% dividend yield, best-in-class net margins of 22.6%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — TSAKOS ENERGY NAVIGATION LTD meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 8.65% dividend yield, and the combination of 19.6% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, TSAKOS ENERGY NAVIGATION LTD receives a Buy rating with a composite score of 70.8/100 (rank #80 of 7,333). Our quantitative framework assigns a Narrow Moat (44/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 65/100.

Our analysis supports a constructive view on TSAKOS ENERGY NAVIGATION LTD. The combination of identifiable competitive advantages, medium uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.