A 10% Dividend Yield, 14 Straight Dividend Hikes, With More Due In 2017

Summary

  • Management has raised the dividend for 14 straight quarters.
  • The stock yields 9.7% with a conservative trailing payout ratio of 76%.
  • Management expects to continue to pay increasing dividends.

Growth, whether it's dividend growth or earnings growth, we all want to be in on the rising part of the trajectory. In the shipping biz, the usual way to create growth is to take on new vessels, which is what Norway-based Ocean Yield ASA (OTCPK:OYIEF) has concentrated on over the past several quarters.

Ocean Yield has taken on 20 vessels over the past five quarters:

(Source: OYIEF site)

It's also very appealing to us that these vessels are deployed in a variety of industries, which diversifies OYIEF's business risk.

Another plus is that it operates on long-term contracts; currently, it has an average of 11.4 years left on its fleet's contracts with a backlog of $2.8B:

(Source: OYIEF Q1 '17 report)

We began covering OYIEF in early January 2017. Our previous articles can give you more background on this company, which went public in July 2013 on the OSLO stock exchange.

You can buy OYIEF in two ways - on the Oslo exchange or via the US OTC Pink Sheets. Although it sometimes shows very low volume in the US, we've seen it trade over 100,000 shares/day.

You also can buy it on the Oslo exchange via some US brokers, such as Schwab, for an approximate $100.00 commission.

It would be a good idea to compare the translated currency amount from Norwegian krone/share into US dollars per OTC share - sometimes there's a disparity.

Earnings: You want earnings growth? Here it is - revenue rose 18%, adjusted net profit grew 21%, and EBITDA rose 22% over the past four quarters.

Dividends/share grew nicely also, up 15.73%. Plus, management slightly decreased the dividend payout ratio, thanks to strong earnings, even though the unit count grew over 10%.

The Q1 '17 year-over-year growth figures for revenue, adjusted net profit, and EBITDA all looked robust...

This article was written by

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Target 5-10% yields backed by solid earnings for better portfolio income.

Robert Hauver, MBA, was VP of Finance for an industry-leading corporation for 18 years, and publishes SA articles under the name DoubleDividendStocks. TipRanks rates DoubleDividendStocks in the Top 25 of all financial bloggers, and Seeking Alpha rates us in the Top 5 of several categories, including Dividend Ideas, Basic Materials, and Utilities. 

"Hidden Dividend Stocks Plus", a Seeking Alpha Marketplace service, which focuses on undercovered and undervalued income vehicles. HDS+ scours the world's markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

Disclosure: I am/we are long OYIEF, NAP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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