Shipping earnings roundup: Here come the dividends
In the recent flood of earnings reports by U.S.-listed ocean shipping companies, common themes have risen to the surface: Third-quarter results are still in the red and weaker than expected, earnings are being impaired by out-of-service time due to exhaust-gas scrubber installations, rates are up sharply in the fourth quarter, and as sentiment brightens, dividends are now back in vogue.....MUCH MORE
Here come the dividends
“We think the reemergence of dividends will become a major theme in shipping equity markets over the next 12 months as companies institute and grow payouts in response to firming day rates and cleaned-up balance sheets across the group,” asserted Amit Mehrotra, transportation analyst of Deutsche Bank, in a new client note.
Dry bulk owner Genco Shipping & Trading (NYSE: GNK) has just announced a regular dividend of $0.175 per quarter – its first regular dividend since 2008 – plus a special dividend of $0.325 per share.
During the quarterly conference call on Nov. 7, multiple analysts congratulated Genco CEO John Wobensmith on the arrival of his new dividend with the exuberance of friends congratulating a father on the birth of his newborn baby....
.... Genco’s decision was just the latest in a series of dividend moves and comments. On Nov. 5, product-tanker owner Ardmore Shipping (NYSE: ASC) said that it was “poised to resume” its dividend of 60% of earnings from ongoing operations.
Crude-tanker owner Euronav (NYSE: EURN) changed its dividend timing on Oct. 29 from semi-annual to quarterly “to repatriate cash flows more quickly.” On Oct. 24, crude-tanker owner DHT Holdings (NYSE: DHT) upped its quarterly dividend from $0.02 to $0.05 per share despite a net loss and pointed out how current rates would translate into dividends going forward of at least 60% of net income. On Oct. 23, Scorpio Bulkers (NYSE: SALT) announced a large special dividend comprised of shares.
Mehrotra believes more shipping dividend upside is around the corner. “We see opportunity for Euronav and Star Bulk [NASDAQ: SBLK] to implement high-yielding dividends over the next 12 months, a potential catalyst for the stocks,” he said....
