When I started putting together a list of shipping stocks for this blog I decided to have sub-lists related to the sub-sectors in the industry. Another thought was to separate out the dividend paying stocks, since that tends to be a major attraction in the shipping space. That genius idea led to the formation of a list of stocks that formerly paid regular dividends but have suspended their payouts to conserve cash and try to make their bankers a little happier. The suspended dividend team now sports 7 members vs. the 28 on my list of those still making distributions. In no organized order here they are:
OCNF, DRYS, DSX, GNK, EGLE, SBLK and EXM
On average, these 7 stocks have fallen 40% year-to-date, compared with a 12% average decline of the stocks on my list of continuing dividend payors. If and/or when these companies get their financial house back in order enough to resume dividend payments, the stock price gains will be very attractive. For the bottom fishing types, these companies could be attractive if one assumes that all past and future bad news is already baked into the share prices.Even though the charter rates have rallied off the recent lows, these companies still need the global economy to rev up and ship values to improve to really get back to stability.
From my scanning of the recent news on the list here, I think that DSX and GNK are probably in the best shape. DRYS and SBLK are scary. Not enough information in the data bank to form an opinion on the others. Final note, I have checked the Dry Bulk category for this article because all of the companies here with the suspended distributions are in that line of shippage.
4 Comments
Can you tell me when PRGN will publish their 4th quarter results? I thought they were due on the 20th.
I checked on PRGN and they have not released a date yet. In my experience, delayed earnings releases are because management is trying to figure out how to spin bad news.
I received an email that Golden Ocean should be on this list. I do not track GOGL because it does not trade on a U.S. market.
Tim,
Why do you believe DRYS and SBLK are scary? I believe they are both down over 90%, do you see the equity being wiped out?
I see both of these companies scrambling to find ways to fund their ships and operations. SBLK is issuing stock instead of cash for dividends, thus diluting shareholder values. DRYS is trying to tap the equity markets for more cash, same dilution.