Tidewater Inc. (TDW)

Tidewater (TDW), the world’s largest operator of offshore support vessels (OSVs), is strategically positioned to benefit from a tightening global offshore energy market. With 211 vessels operating across 60 countries and a fleet heavily weighted toward high-specification assets like large PSVs and AHTS ships, Tidewater enjoys industry-leading scale and reach. The company is demonstrating strong operating leverage, growing net income at a faster rate than revenue, and recently reported record day rates of $22,303 in Q1 2025, despite weaker oil prices. This highlights the strength of underlying demand and Tidewater’s pricing power in a supply-constrained market, where utilization rates for its fleet have exceeded the 90% range.

The investment case rests on a compelling combination of fundamentals and structural tailwinds. Free cash flow in 2024 reached $331 million (16% FCF yield), with further upside likely as day rates continue to rise. With minimal new vessel supply entering the market—current day rates are still far below the $44,000 threshold needed to justify new builds—Tidewater stands to benefit from long-term pricing tailwinds. The company is using its robust cash flows to reduce debt and aggressively buy back shares, maximizing shareholder value. Trading at just 4–5x EBITDA with conservative NAV estimates suggesting a fair value more than double the current share price, Tidewater offers an unusually wide margin of safety in a structurally improving industry.