• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Energy

Gulf Island Fabrication Fabricates Dividend Despite Tough Energy Market

The builder of offshore drilling platforms manages to eek out a payout thanks to a fairly strong balance sheet.
By JONATHAN HELLER
Jun 14, 2017 | 11:00 AM EDT
Stocks quotes in this article: GIFI

Last night the Seattle Mariners were getting trounced by the Minnesota Twins, losing 19-6, when they brought in 38-year-old catcher Carlos Ruiz to pitch an inning. Ruiz, who gave up one run in his inning of work, displayed an 82-mph fastball and had one of the better performances by Mariners pitchers. It's pretty rare to see a non-pitcher called to the mound, let alone a catcher who is approaching the end of his career.

Even rarer these days are net-nets -- companies trading below net current asset value, calculated as current assets minus all liabilities -- and rarer still, net-nets that pay dividends. Recently I came across a new name, Gulf Island Fabrication (GIFI) , that fits both bills to grace my ever-shrinking list of net/nets.

Gulf Island Fabrication builds offshore drilling platforms and has had a rough go of it the past several years, with its shares currently trading at about one-third of 2013 levels. Depressed oil and gas prices have wreaked havoc on the company and losses have mounted, which is why Gulf Island Fabrication finds itself in net/net land, a place that no company would go by choice.

The thing that has allowed Gulf Island Fabrication to stay afloat is a fairly strong balance sheet, one that shows no debt. GIFI also ended its latest quarter with $34.7 million, or $2.33 per share, in cash. While cash can be fleeting when companies are in the red, Gulf Island Fabrication has up for sale a major asset, its South Texas facilities, which have a book value of $110 million. Selling the facilities could provide substantial liquidity for the company and potentially help it weather the current storm. (The fact that the assets are for sale is also the very reason Gulf Island Fabrication now qualifies for net/net status, as those assets have been reclassified as current assets rather than long-term assets; net/net determination only considers current assets in the calculation).

Gulf Island Fabrication currently trades at 0.95 times net current asset value and 0.6 times tangible book value per share. The company also pays a dividend -- albeit a very small one, of one cent quarterly -- and currently yields 0.4%. If and when the assets are sold, it is unclear what the company will do with the proceeds, but dividends and stock buybacks are among the possibilities that management mentioned on the most recent quarterly earnings call.

This one is certainly not a pretty picture, given the difficulties in the oil and gas industry, but net/nets rarely are. That's what makes them so intriguing.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Heller had no positions in the stock mentioned.

TAGS: Investing | U.S. Equity | Energy | Dividends | Oil Equipment/Services | Stocks

More from Energy

Let's Look Under the 'Shell' of This ESG-Style Fund

Mark Abssy
Jun 28, 2022 2:00 PM EDT

One of the Nuveen Global Net-Zero Transition exchange-traded fund's largest holdings is Shell, so let's drill down on this supposedly environmentally friendly ETF.

The Fed Blinked and So Did We

Peter Tchir
Jun 27, 2022 9:30 AM EDT

Here's what we need to get a bigger rally.

See That Down the Road? It's the Big 'Green' Bubble, Ready to Pop

Jim Collins
Jun 24, 2022 1:30 PM EDT

Environmental, social, and corporate governance has created a monster and gullible investors should hit the brakes on their EVs and run from the Washington technocrats while they have the chance.

Weber's Rally Was Cooked Up By the Shorts and Something I Experienced First Hand

Jonathan Heller
Jun 24, 2022 10:00 AM EDT

It should be an interesting ride from here.

Will This Year's Energy and Commodity Trades Become Last Year's Tumbling Tech?

Helene Meisler
Jun 24, 2022 6:00 AM EDT

I can't remember the last time anyone asked me about Apple. No one cares.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:56 AM EDT STEPHEN GUILFOYLE

    Stocks Under $10

    Check out what's going on in the Stocks Under $10 ...
  • 12:04 AM EDT PAUL PRICE

    Two Good Signs -- Especially for Small-Cap Investors

  • 12:10 AM EDT PAUL PRICE

    More Insider Buying in American Woodmark (AMWD)

    American Woodmark , which I've discussed here fr...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login