DHT Holdings currently trades at $18.16 and has been a dream stock for shareholders. It’s returned 214% since July 2021, more than tripling the S&P 500’s 70.1% gain. The company has also beaten the index over the past six months as its stock price is up 31.4% thanks to its solid quarterly results.
Is now the time to buy DHT Holdings, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is DHT Holdings Not Exciting?
Despite the momentum, we’re sitting this one out for now. Here are three reasons we avoid DHT, plus one stock we’d rather own.
1. Long-Term Revenue Growth Flatter Than a Pancake
Cyclical industries such as Energy can make mediocre companies look great for a time, but a long-term view reveals which businesses can actually withstand and adapt to changing conditions. Unfortunately, DHT Holdings struggled to consistently increase demand as its $448 million of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and signals it’s a lower quality business.
2. Fewer Distribution Channels Limit Its Ceiling
The scale of a company’s revenue base is an important lens through which to view the topline, as it signals whether a producer has gone from a vulnerable commodity taker into a durable operating platform. Larger producers generate revenue across many wells, pads, takeaway routes, and geographies rather than relying on a single field or drilling program.
DHT Holdings’s $448 million of revenue in the last year is pretty small for the industry, suggesting the company is a subscale business in an industry where scale matters.
3. Low Gross Margin Reveals Weak Structural Profitability
While energy gross margins can be distorted by commodity prices, hedging, and short-term cost swings, sustained margins across a full cycle reflect a producer’s underlying asset quality, infrastructure position, and cost structure.
DHT Holdings, which averaged 33.4% gross margin over the last five years, exhibited bottom-tier unit economics in the sector. It means the company will struggle at higher commodity prices than peers with better gross margins.
Final Judgment
DHT Holdings isn’t a terrible business, but it isn’t one of our picks. With its shares topping the market in recent months, the stock trades at 6.1× forward P/E (or $18.16 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We’re fairly confident there are better stocks to buy right now. Let us point you toward one of Charlie Munger’s all-time favorite businesses.
Stocks We Like More Than DHT Holdings
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Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
