K-Sea Transportation KSP has announced their results for the 4th quarter and the continued payout of the 77¢ quarterly distribution. Revenues and earnings continue to fall for this U.S. based barge shipper of petroleum products.  Cash for distribution was only 85% of the amount to be paid out this quarter. For the entire year K-Sea had a 92% cash flow coverage of the distribution.

Investors holding this stock for the income should be nervous. Company management contends they will continue the distribution rate through the end of 2009. We shall see.

Dryships, Inc. DRYS reported quarterly earnings a couple of days ago and this one-time high flyer continues to struggle with revenues and earnings. 2nd quarter earnings net of one-time items were 25¢ per share compared to $6.95 a year earlier. Total earnings fell to $52.8 million from just under $300 million. This is a 82% decrease. Earning per share, however, fell 97%. That is some serious dilution.

Drybulk revenues fell 59% to $99.9 million compared to Q2 2008. Dryships completed its purchase of Ocean Rig in the 2nd quarter of 2008 and a year later the segment kicked in $103.6 million in revenue. The addition does not seem to be adding much to the bottom line.

To me Dryships is an overleveraged, over diluted symbol of what can go wrong with aggressive, bank financed growth. Those who think this stock can return to the glory days of early 2008 will be waiting a long time.

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

International Shipholding Corp. ISH reinstated a 50¢ per share dividend in the 3rd quarter of 2008 and has now paid that rate for 3 quarters in a row. The dividend appears secure as the company earned well over $4.00 per share in 2008 and a $1.31 in the 1st quarter of this year.

K-Sea Transportation Partners KSP has paid 77¢ per share for the last several quarters. Before that it had a history of steadily increasing payouts. Four years ago the distribution was 54¢ per share. Over the last couple of quarters distributable cash flow has fallen below the actual distribution. A dividend reduction for KSP would not be a surprise.

Knightsbridge Tankers VLCCF did not pay a dividend for the 1st quarter of 2009. VLCCF is a tanker company that lives and dies on the tanker spot market and the dividend follow along with the fluctuating revenues.. Over the last 5 years the quarterly dividend has been between $0.00 and $2.00 per share. Total distribution per share was $2.75 in 2008 and the best recent year was 2004 with $5.50 earned by shareholders.

I think the three stock listed today show the broad range of dividend policies and coverage in the shipping sector.

Here are the payors 21 through 25 on my list. The stocks are listed in this order: Company and stock symbol, dividend earned on $1000 invested on 1/1/2009 (divide by 5 to get an annualized percentage) and the share price change since the beginning of the year.

• Teekay Tankers , $103.49, -2.3%
• Navios Maritime Partners LP, NMM, $112, +40.6%
• K-Sea Transportation Partners KSP, $11.858, +60.5%
• OSG America LP, OSP, $152.25, +41.2%
• Capital Product Partners LP CPLP, $186.88, +28.6%

Tankers, tankers and more tankers! As I finish up the 25, I now see that 15 of the stocks that are still paying dividends are in the tanker business and 8 of the top 10. Of this group Navios Maritime Partners is in dry bulk and K-Sea is river barges of the tanker variety.

The yield figure for this group are skewed due to my practice of starting with an equal dollar weight of each stock as of January 1, 2009. As you can see from the price appreciation, many of these stock had been beaten down too far by the first of the year, thus putting a higher number of shares in my model portfolio. I need to figure out a way to balance this out going forward, since I doubt any of us will be able purchase share at prices similar to the beginning of 2009.

Do note that these stocks are still trading at very high yields based on the current share prices. This would indicate that the market is still discounting a dividend cut for these companies. Teekay Tankers has their vessels on the spot market, so the dividend will probably be lower. K-Sea is paying out more than what I see as free cash flow. I am not familiar enough with OSG America and Capital Product Partners to make a guess on the status of their payouts. I currently own a position in Navios Maritime Partners and hope the payout is secure.