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This is the first article in a series. We'll start by looking at five tanker stocks with very tempting yields.

Stocks that pay out decent dividends provide investors with two sources of potential income, one from the dividend's payments and the other via capital gains if the stock should appreciate in value. When investing in stocks such as Apache Corp (APA), Weatherford International, Ltd (WFT), etc. where the dividend is very small or non existent, an investor has to hope the stock moves in the right direction for him to book a profit; hence, he has only one possible source of income from this company.

I want to emphasize that investors should not focus only on the yield but dig deeper to find out if the stocks below fit their risk profile. In other words, do your own due diligence. What might be construed as an acceptable risk by one investor could be viewed as totally unacceptable by another.

Stock

Dividend

Market Cap

Forward PE

Price/ book

Total Cash

Operating margins

Revenue

Operating

Cash flow

FRO

15.4%

220M

----

0.33

173

11.49

931M

202M

A:LEX

3.6%

1.42B

15.66

1.28

17M

6.2

1.73B

111M

SBLK

16.10%

96M

---

0.19

18M

7.32

110

N/A

DHT

11.3%

606.65M

11.7

0.32

45M

23.99

97.6

35.05M

NM

7.0%

324M

5.28

0.33

194M

22.69

710M

112M

Frontline Ltd. (FRO)

It has a market cap of roughly $220 million and enterprise value of $2.74 billion. The total cash it has amounts to $0.77 per share. FRO has a levered free cash flow of $90 million and a price/sales value of 0.33. It is also trading roughly $6 below book and has a rather high short interest which makes it a good candidate for a short squeeze. Frontline Ltd. shares were down 13% Wednesday in the wake of the shipping firm's report of disappointing third-quarter results and disclosure that a restructuring will commence next year.

  • Short percentage of float 24.7
  • Percentage held by institutions 29
  • Percentage held by Insiders 33
  • ROE -2.14
  • Qtrly Earnings Growth (yoy) N/A
  • Total debt 2.66B
  • 200 day moving average $ 10.12
  • Book value $9.15
  • Dividend yield 5 year Average 18.3
  • Dividend rate $.47
  • Payout ratio 37
  • Dividend growth rate 5 year average -4.77
  • Consecutive dividend increases 0 years
  • Paying dividends since 2002
  • Debt/equity ratio 376%
  • Total return last 3 years -74
  • Total return last 5 years -28

Alexander & Baldwin, Inc (ALEX)

It has a market cap of roughly $1.42 billion and enterprise value of $2.02billion. The total cash it has amounts to $0.41 per share. ALEX has a levered free cash flow of $117 million and a price/sales value of 0.85. ALEX has a spectacular history of paying out dividends; it has been paying dividends since 1902.

  • Short percentage of float 3.2
  • Percentage held by institutions 74.5
  • Percentage held by Insiders 1.96
  • ROE 5.24
  • Qtrly Earnings Growth (yoy) -66
  • Total debt $570M
  • 200 day moving average $ 43.14
  • Book value $ 27.46
  • Dividend yield 5 year Average 3.8
  • Dividend rate $1.26
  • Payout ratio 110
  • Dividend growth rate 5 year average 5.43
  • Consecutive dividend increases 0 years
  • Paying dividends since 1902
  • Debt/equity ratio 50
  • Total return last 3 years 74.99
  • Total return last 5 years -7.21

Star Bulk Carriers Corp (SBLK)

It has a market cap of roughly $96.7million and enterprise value of $ 341million. The total cash it has amounts to $0.24 per share. It is trading roughly $5 below book value.

Star Bulk Carriers Corp posted a narrower-than-expected quarterly loss as the Greek drybulk carrier cut costs to overcome lower rates in a weak tanker market. Average daily time charter equivalent rate fell 28 percent to $18,808 while voyage revenue dipped 13 percent to $26.2 million. Vessel oversupply combined with a shaky global economy is dragging down rates.Third-quarter net loss was $3.0 million, or 4 cents per share, compared with a net income of $1.2 million, or 2 cents per share, a year ago.

  • Short percentage of float 0.3
  • Percentage held by institutions 22
  • Percentage held by Insiders 13
  • ROE 4.32
  • Qtrly Earnings Growth (yoy) N/A
  • Total debt $264M
  • 200 day moving average $ 1.65
  • Book value $ 6.62
  • Dividend yield 5 year Average N/A
  • Dividend rate $0.20
  • Payout ratio 47
  • Dividend growth rate 3 year average -31.00
  • Consecutive dividend increases 1 years
  • Paying dividends since 2008
  • Debt/equity ratio 45
  • Total return last 3 years -14
  • Total return last 5 years -71

DHT Holdings, Inc. (DHT)

It has a market cap of roughly $60 million and enterprise value of $ 324million. The total cash it has amounts to $0.70 per share. It only started paying out dividends in 2010, so it remains to be seen if it can maintain this lofty rate. DHT has a levered free cash flow of $ -104 million and a price/sales value of 0.67. It is also trading roughly $2 below book value.

  • Short percentage of float 4
  • Percentage held by institutions 38.55
  • Percentage held by Insiders 9.6
  • ROE -18
  • Qtrly Earnings Growth (yoy) N/A
  • Total debt $304
  • 200 day moving average $ 3.16
  • Book value $ 2.88
  • Dividend yield 5 year Average N/A
  • Dividend rate $0.33
  • Payout ratio 94
  • Dividend growth rate 3 year average -38.9
  • Consecutive dividend increases 1 years
  • Paying dividends since 2010
  • Debt/equity ratio 124
  • Total return last 3 years -50
  • Total return last 5 years -64

Navios Maritime Holdings Inc (NM)

It has a market cap of $327 million and enterprise value of $ 1.63 billion. The total cash it has amounts to $1.92 per share. It only started paying out dividends in 2010, so it remains to be seen if it can maintain this lofty rate. NM has a levered free cash flow of $11.4 million and a price/sales value of 0.49. It is also trading roughly $7 below book value.

  • Short percentage of float 0.4
  • Percentage held by institutions 31
  • Percentage held by Insiders 24
  • ROE 6.82
  • Qtrly Earnings Growth (yoy) 11.3
  • Total debt $1.48B
  • 200 day moving average $ 4.16
  • Book value $ 10.28
  • Dividend yield 5 year Average 8.7
  • Dividend rate $0.24
  • Payout ratio 37
  • Dividend growth rate 5 year average 5.76
  • Consecutive dividend increases 0 years
  • Paying dividends since 2006
  • Debt/equity ratio 146
  • Total return last 3 years 233
  • Total return last 5 years -12

Disclaimer: This is not a buy to list of stocks and should be used as a starting point by investors who are seeking higher yields. I cannot stress this enough; it is imperative that you do your due diligence on the stocks provided above before you even consider deploying one cent into them. One of the things to check is to see if the dividend is sustainable and if the business is generating enough cash to pay its dividend, otherwise one could be in for an unpleasant surprise. Make sure that the stock meets your risk tolerance levels. What might be construed as a good investment by one person could be seen as a terrible investment by another. The Latin maxim caveat- emptor applies-let the buyer beware.

Source: 5 Tankers Offering Terrific Dividends (Part I)