Good Dividend News: Nordic American Tanker, Aircastle

With the market as ugly as it has been over the last week, it is nice to get some good dividend news on a couple of the stocks I follow. Markets like these tend to drive down the good along with the troubled and many good companies become great values. The problem is that a fear driven market can continue to fall with no regard to strong fundamentals. When strong dividend paying stocks make a positive announcement it can help prop up the stock price.

Nordic American Tanker (NAT) CEO Herbjørn Hansson has issued a letter to shareholders indicating the 3rd quarter dividend will be in the $1.50 range. This is close to the $1.60 paid for the very profitable second quarter. The letter reported strong daily charter rates for the quarter and at this point most of the earnings are in the bank for the 3rd quarter.

NAT leases all but one of its Suezmax tankers on the spot market and has very low daily expenses for its vessels. Dividends fluctuate significantly with the spot market rates but the stock has historically paid at least a 10% annual dividend. With the share price in the low $30s the stock should reward shareholders handsomely in the coming quarters.

Aircastle Limited (AYR) has announced a 25¢ dividend for the shareholders of record on September 30. AYR reduced the dividend by over half in the first quarter of this year and this is the 3rd quarter in a row at the 25¢ rate. The company has free cash flow in the $1.00 range so the 7.8% yield is well covered. I believe the company will start increasing the dividend again when the current financial turmoil settles and in the meantime shareholders are being paid well to hold the stock.

Note: I currently have a long position in NAT.

Comments

[notsosmart:]

check out FRO.i have no connection to this stock(except happy shareholder),or wall st.the ceo gets no pay-just diviidends as told to me by the experts.nobody has figured out a way to pave over the ocean

2008 Sep 14 01:13 PM

[notsosmart:]

it depends on when you buy it & for what price.anyway-look where he is.

2008 Sep 14 02:27 PM

[Buzsaw:]

I have a key labeled 'shift' , but none labeled 'SHIFT'. Anyway, both FRO and NAT are seemingly good dividend stocks.

2008 Sep 15 03:22 AM

[oldfolkdancer:]

I'm a fan and long time holder of dry bulker Diana Shipping DSX

2008 Sep 15 10:27 AM

[ripskii:]

Your comments are on target. AYR owns a fleet of next generation aircraft that are the most fuel efficient and hence the most economical to operate at current high fuel prices. They are valued at less than book value of their aircraft and no one is selling their most fuel efficient aircraft near book value. Once the market realizes this fact AYR will recover from their presently valuation. It might be rough ride in between, but eventually this factor will be recognized by value analysis.

2008 Sep 16 12:30 AM