Today I will continue onward with my lightweight analysis of the dividend paying stocks in my shipping stocks universe. When you are investigating these stocks it is important to know how they earn their revenues and the general plan of how they turn those revenues into dividend distributions.
I am going through the list of dividend paying shipping stocks alphabetically and here is the next bunch:
Frontline Ltd FRO earns its revenues by contracting the majority of the company’s tanker fleet on the spot market. This leads to tremendous fluctuation on the quarterly dividends, but also very high payouts when tanker rates are good. In this decade the quarterly payouts have ranged from nothing to $5.00 per share. Over the last 3 calender years the distributions have averaged $6.25 per share. The spot tanker market has been very tough during the worldwide economic slowdown and FRO has paid only 25¢ for each of the last 2 quarters.
General Maritime Corp.GMR has a target quarterly dividend of 50¢ per share. The company has been paying this rate since paying a one-time dividend of $15.00 in early 2007. Cash flow (earnings + depreciation) seems more than adequate to allow continued payouts at this rate. The stock seems a little undervalued.
Horizon LinesHRZ has been paying 11¢ per share since at least the 3rd quarter of 2005. This U.S. flagged container company is struggling in the current economic slowdown. The 12% dividend yield could be tempting to anyone anticipating a near term recovery in U.S. economic activity. Current cash flow may not be enough to sustaing this dividend, so watch this one carefully.
I think you can see from these 3 stocks that the stability and quality of the dividends varies greatly in the shipping sector. GMR at a 20% yield seems like a steal to me, but I urge you to do your own research. When the market pushes stocks to these kind of yields something bad (dividend cut) often happens. The other side is that the market will lump the FROs with the GMRs even though they have very different ways of earning their revenues and an astute investor will find a gem.
Quality of Dividends, Part II
Today I will continue onward with my lightweight analysis of the dividend paying stocks in my shipping stocks universe. When you are investigating these stocks it is important to know how they earn their revenues and the general plan of how they turn those revenues into dividend distributions.
I am going through the list of dividend paying shipping stocks alphabetically and here is the next bunch:
Frontline Ltd FRO earns its revenues by contracting the majority of the company’s tanker fleet on the spot market. This leads to tremendous fluctuation on the quarterly dividends, but also very high payouts when tanker rates are good. In this decade the quarterly payouts have ranged from nothing to $5.00 per share. Over the last 3 calender years the distributions have averaged $6.25 per share. The spot tanker market has been very tough during the worldwide economic slowdown and FRO has paid only 25¢ for each of the last 2 quarters.
General Maritime Corp. GMR has a target quarterly dividend of 50¢ per share. The company has been paying this rate since paying a one-time dividend of $15.00 in early 2007. Cash flow (earnings + depreciation) seems more than adequate to allow continued payouts at this rate. The stock seems a little undervalued.
Horizon Lines HRZ has been paying 11¢ per share since at least the 3rd quarter of 2005. This U.S. flagged container company is struggling in the current economic slowdown. The 12% dividend yield could be tempting to anyone anticipating a near term recovery in U.S. economic activity. Current cash flow may not be enough to sustaing this dividend, so watch this one carefully.
I think you can see from these 3 stocks that the stability and quality of the dividends varies greatly in the shipping sector. GMR at a 20% yield seems like a steal to me, but I urge you to do your own research. When the market pushes stocks to these kind of yields something bad (dividend cut) often happens. The other side is that the market will lump the FROs with the GMRs even though they have very different ways of earning their revenues and an astute investor will find a gem.