For the year, on an equal dollar basis, the average share price gain for the 42 shipping stocks was 6.53%. Dividends tossed in another 2% putting the total gain at about 8.5%. For comparison, the DJIA was up 18l.8% for 2009 and the S&P 500 gained 23.5%. The list of shippers was evenly split between gainers and losers, 21 each. The shippers that continue to pay dividends performed significantly better with an average share price gain of 15.25% and the dividends paid by these companies added another 15% based on the share values at the beginning of 2009.

The top 3 shipping stocks were:

• Navios Maritime Partners NMM +107%
• Navios Maritime Holdings [[NM]] +91.5%
• Golar LNG Limited GLNG +89.6%

NMM also threw in over $1.60 per share in dividends on a share price that started the year at $7.14!

Here are the three bottom shipping stocks:

• Ocean Freight [[ONCF]] -69%
• Omega Navigation ONAV -51%
• Global Ship Lease GSL -50%

Also of note near the bottom of shipping stocks if former crowd favorite DryShips, which managed to lose 45% of its stock value in 2009.

2008 and 2009 brought a lot of changes to the shipping industry. Conservative players were able to enhance the value of their assets while the highly leveraged crowd mostly ended up highly diluted and still with large debt loads that must be serviced with ships earning lower rates.

My plans for this site in 2010 is to be mostly focused on stocks that pay dividends. That is my prime interest. I will be adding analysis of other high yield stocks into the mix.

I did not spend much time reading when the 2nd quarter results came out, so these comparisons are for Q3 2009 against Q3 2008, just as the shipping meltdown was commencing. However, share prices for many of these stocks have recovered smartly over the last 6 months and I am wondering if the current valuations are justified. I have not looked at share price for this article, just dug out the financial numbers. Here are some telling numbers for several of the dry bulk shipping stocks:

• Paragon Shipping PRGN
• Net income: $15 million/33¢ vs. $14.6 million/ 54¢
• Shares outshanting: 44.7 million vs. 27 million
• TCE $34.7k vs. $40.2
• Daily expenses per vessel: $5983 vs. $8365 – Nicely done!
• 5¢ dividend
• 100% contracted for 2010, 90% for 2011 – Revenues should be stable at current level

• Ocean Freight ONCF
• Net: $9.5 mil/11¢ vs. $8.9 mil/61¢
• $20 mil loss on sale of vessel pushes results to 15¢/share loss
• Shares outstanding: 90.4 million vs. 14.6 million!!!!!!

• TopShips TOPS
• Net income 1¢ vs. $1.44 per share
• Revenue: $25 mil vs. $71 mil
• Debt of $407 million in breach of loan covenants
• This one is $1.00 per share and going under!

• Eagle Bulk Shipping EGLE
• Net income: $3.9 million/6¢ vs. $23 million/49¢
• 62 million shares vs. 47 million
• Revenues $41.5 mil vs. $51.5 mil
• Interest expense: $10.6 mil vs. $3.3 mil
• Eagle is still growing their fleet and debt. I would like to see more cash getting to the bottom line.

• Safebulkers SB
• Net income $22.2 mil/41¢ vs. $39.2 mil/ 72¢
• TCE $30k vs. $52.7k
• declared 15 cent dividend
• 86% employed for 2010, 59% for 2011

• Diana Shipping DSX
• Net income: $28.7 mil/ 36¢ vs. $57.6 mil./ 77¢
• Revenue: $58.2 mil. vs. $87.4 mil.

• Excel Maritime EXM
• Net income: $62 mil/79¢ vs. $117.6 mil/$2.66
• TCE $22k vs. $34k
• 54% employed for 2010
• Shares: 78.9 million vs. 44.2 million

For those of you new to shipping, TCE is time charter equivalent, or how much the company earned per day/per vessel.

With shipping rates under pressure from new vessels coming onboard plus the high debt loads of these companies, any investor should take a close look at the stock valuations. I would not be surprised to see a serious pullback in the share prices of the dry bulk shippers.

Safe Bulkers Inc. SB has this on their website concerning the dividend policy:

We paid our first quarterly dividend as a public company of $0.1461 per share in August 2008, and subsequent dividends of $0.475 per share and $0.15 per share in November 2008 and February 2009, respectively. We also declared a dividend of $0.15 per share on May 6, 2009 for the shareholders of record on May 22, 2009, payable on or about May 29, 2009.

The company currently has excellent cash flow coverage for the 15¢ dividend but is also collecting from some very high TCE contracts. I would expect the average TCE to erode significantly over the next 5 to 6 quarters.

Seaspan Corp SSW reduced the dividend for the last quarter from 47.5¢ per share to 10¢. This allows them to retain $100 million per year to help pay for new building vessels. Seaspan appears to be in good shape financially, but is hunkering down until global trade improves.

Ship Finance International SFL had been steadily increasing their dividend until the 4th quarter of 2008. At that time they slashed the dividend from 60¢ quarterly to 30¢ and offered shareholders the option to take the distribution in additional stock. My belief is the company has enough cash flow from long term contracts to cover the old rate and should start increasing the payout soon. I have a personal holding in SFL.

I have now covered 18 of the 25 stocks in my dividend paying list. I hope you have found a few of the stocks to be of interest.

I am going to put the numbers up and you can decide what is important. As I noted yesterday the new indices from Capital Link align nicely with how I have been tracking the sector. The biggest difference is that my results are equal dollar weighted while the indices are market cap weighted. I also track the dividends paid, which the indices currently do not do.

On comparable subsectors I will show the returns of the stocks I track first with the number of stocks in parenthesis. Then will be my calculation of the Y-T-D returns on the parallel CL index. A couple of the CL indices will be on their own.

• All shipping stocks tracked: +0.59% (42)    CL Maritime: -13.45% (42)
• Tanker stocks: +2.61% (18)       CL Tanker: -13.12% (18)
  
• Drybulk stocks: +1.08% (11)     CL Drybulk: -1.05% (14)
• Container & mixed fleet: -15.38% (8)    CL Container: -7.75% (6) CL Mixed: -7.57% (6)
  
• Other shipping stocks: +32.50% (3)
• CL LNG/LPG: +29.66% (3)
  
• CL MLP: +29.00% (5)

On the overall index it is interesting to note the difference component weighting can make. I would guess that having Dry Ships DRYS lose 45% of their market cap this year had a significant effect on the CL Maritime Index.

For those who must know, the big winners in my other shipping stocks are KSP and ULTR .

With those returns I thought there would be more cross-over between the LNG/LPG index and the MLP index. The only stock in common is TGP.

Finally, Go ML

• Capital Link Maritime Index
• Capital Link Tanker Index
• Capital Link Drybulk Index
• Capital Link Container Index
• Capital Link LNG/LPG Index
• Capital Link Mixed Fleet Index
• Capital Link MLP Index

The components of the indices all trade on the U.S. stock exchanges. Component values in the indices will be market cap weighted and updated at the end of each trading day.

I think these indices will be a great tool for investors. Until this development the most used source of shipping information were the Baltic indices. These are shipping cost trackers and their results on the Baltic exchange do not always translate to shipping stock values.

I have divided up the shipping stocks I watch in a similar manner to the categories listed above. My differences is that I have included the LNG/LPG in with the tankers and I did not think of making the MLP stocks a separate category. Great idea! It is interesting to me that the over Maritime Index has 42 stocks, the same number I track. However, a quick scan of the stocks revealed some differences and I want to do a line by line comparison.

My email exchange with Capital Link President, Nicolas Bornozis, gave this site free rein to use the index information as it suits me to inform the readers here. I plan to do just that.

I will close with some good links about the indices:

• Closing values: www.maritimeindices.com
• Index components
• Capital Link Shipping

Have a profitable week