DSX Lover

Diana Shipping: Prime Rebound Candidate

SBLK, has an old fleet. DRYS earnings are very volatile, any plunge in Spot rates, there goes the stock, aslo 1.25 billion Debt. PRGN, GNK, SBLK, and NM are highly leveraged with older ships. DSX is sound, the higher P/E does not reflect the company's strong capital, and with 50% earnings growth for 2008 is misleading, meanwhile DRYS will not grow EPS by 50% and has to serve that Huge Debt. Other carriers that pay higher dividends than DSX are leveraged 100% to 300% more, hey if DSX borrowed it could doubled its Dividend and still be superior, but that is not the way it operates. It is a more conservative company, and as long as Panamax Rates stay at 50K or more you can count on that 9% safe dividend. With 50% chartered for 3 years or more, Diana is safe, while all the others could get shellacked with Spot Rates dropping

Diana Shipping: Prime Rebound Candidate

I totally agree with this article on Diana. Diana has very low debt, the newest fleet in the industry, average vessel is under 5 years old with useful life of 25-30 years. With 19 ships, 6 Capesize ships chartered long term 3-6 years, all 13 Panamax Ships chartered 100% through Sept 2008, with 2 becoming available at the time of the grain harvest, where prices are higher. Diana discloses with great detail, who its customers, are, how much are they paying for the ship, and for how long, it updates the fleet deployment chart on the day the change takes place, unlike other shipping companies. It even provides a fleet positioning map to see where the ships are and where are they heading. With 9% Div Yield, and increasing earnings looks to be a horrible short.
Also the last 6 Panamax Ship charters will increase earnings for 2008 by over 75% of 2007. Just look at the rates
Ship 2007 Rate 2008 Term Charter
Erato 30,500 80,300 12-15 months
Dione 28,500 82,000 12-15 months
Protefs 31,650 70,000 6 months
Alcylon 22,582 34,500 5 years
Calypso 26,750 55,000 12-15 years
Nirefs Avg Spot(50K) 60,000 2 Years
Diana Shipping beats the Treasury Yield by 600 Basis Points, with upside potential, and stability.