Flex LNG's Rocky Start Hides a 59-Year Goldmine: Time to Buy the Dip?

Investors, here’s a play that’s been knocked down but is ready to roar back: Flex LNG. Let me cut through the noise. Yes, Q1 2025 revenues dipped—but that’s the point. This is a temporary stumble on a path to a 59-year contracted backlog that’s primed to deliver dividends like clockwork while LNG demand surges. If you’re willing to look past the short-term softness, this could be one of the best income stocks of the decade.

The Dip? Call It a Buying Opportunity

First, the bad news: Flex LNG’s Q1 revenue dropped to $88.4 million from $90.9 million in Q4 2024. The Average TCE rate also slipped to $73,891 per day—a 2% decline from the prior quarter. But here’s what matters: these are paper cuts, not fatal wounds. The revenue dip came because the Flex Artemis was operating under a volatile variable index hire contract, and the Flex Constellation had to be redelivered to the short-term market. Both issues are transitory.

The 59-Year Backlog: The Real Engine of Stability

Let me hit you with the big number: Flex LNG’s minimum firm contract backlog is 59 years. That’s not a typo—it’s a fortress. And if charterers exercise all extension options, it balloons to 88 years. Think about that: a decade-and-a-half of revenue visibility, with Flex Constellation locking in a 15-year deal starting in 2026. This isn’t a company scrambling for contracts; it’s a cash-generating machine with a moat so wide, competitors can’t see over it.

The firm contract coverage for the rest of 2025 is 87.6%, leaving just 15% exposed to spot markets. Even in a softening environment, this backlog ensures dividends stay unshaken.

Dividends: $0.75 a Quarter Since 2021—And Counting

Let’s talk about what you’re here for: yield. Flex LNG is paying out $0.75 per share quarterly, and it’s been doing this since Q4 2021—15 straight quarters. That’s over $650 million returned to shareholders. At current prices, that’s a 12% yield—a number that screams “opportunity” in a 3% interest rate world.

The company has $410 million in cash and no debt maturities until 2028. Its Balance Sheet Optimization Program 3.0 is refinancing debt at lower rates, extending maturities, and freeing up liquidity. The recent $175 million sale-and-leaseback for Flex Courageous? A masterstroke to lock in long-term cash flows.

ESG? This is a Safety Champion

Flex LNG’s 2024 ESG report isn’t just a checkbox—it’s a showstopper. A zero Lost Time Injury Frequency (LTIF) means they’re running one of the safest fleets in the business. Safety = efficiency = lower costs = higher margins. This isn’t just “doing good”; it’s smart capitalism.

U.S. LNG Growth: The Tailwind That Won’t Stop

The company is perfectly aligned with Woodside’s Louisiana LNG project, which just secured FID. When Flex’s vessels come off contract in the coming years, they’ll have a direct pipeline to U.S. export terminals. This isn’t luck—it’s strategic brilliance. The LNG boom isn’t a fad; it’s a decade-long megatrend, and Flex is positioned to capitalize.

The Bottom Line: Buy the Dip, Own the Future

Here’s the deal: Flex LNG’s Q1 stumble is a once-in-a-cycle opportunity. You’re paying for a 12% yield with a backlog that guarantees it. The refinancing, the U.S. LNG tailwinds, and the zero-LTIF safety record? They’re all moats.

This isn’t a trade—it’s an investment. The next time someone says “LNG is risky,” remind them Flex LNG’s contracts are longer than most people’s mortgages.

Action Item: If you’re sitting on cash for income, allocate now. This stock is primed to turn that 12% yield into long-term wealth.

Disclosure: The author is long Flex LNG.