Ecomike

Are Shippers’ High Dividend Yields Sustainable?

You missed some key research. Many of those shippers you listed, like DSX and DRYS canceled their dividends late last year. Others like NMM, NM, and PRGN are not even listed in your list above. EXM is also missing?

PRGN reduced it's dividend to a reasonable size recently, to $.05/quarter, about 5% yeild of current stock price, and about 13% of earnings. It's PE is still under 2.0 right now and it is way underpriced compared to others like DRYS.

I currently own PRGN & NM, and I sold DRYS and sold EXM some time ago.

Another issue is debt. DSX has virtually no debt, which is the reason it has a higher PE. With no debt it can still make money at shipping rates roughly 1/2 those needed by DRYS or EXM due to their debt loads and P & I payment costs that affect profits and cash flow.

DSX is raising cash from stock sales in preparation to buy cheap, distressed ship assets at any fire sales while the recession continues, not to pay dividends as you insinuated, as they canceled their dividend to save cash according to their SEC filings, once again to buy cheap fire sale auctioned ships as their competitors with too much debt sink into oblivion.