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Arguably The Best Dividend Yield In The Shipping Industry: CPLP

|About: Capital Product Partners L.P. (CPLP)
Summary

Capital Maritime Partners offers a well covered 12%+ dividend yield.

Its coverage even improved recently thanks to two more of its ships being contracted out on long term lease.

With one of the lowest leverage ratios in the industry, and a cheap valuation, CPLP makes a very attractive addition to an income oriented portfolio.

Capital Product Partners (CPLP) announced today that they had contracted the Archimidis and Agamemnon out through February 2024 at $44.5 million EBITDA in total (estimate $23k gross rate / day pending further information).

Source: CPLP Presentation adjusted for latest news release

This further ensures what was already one of the best covered dividends in the shipping industry (3.5x coverage last quarter).

Source: CPLP Presentation

While I don't really expect CPLP to increase its dividend meaningfully in the short term, instead using excess cash flow for drop-downs and ship purchases, it's hard to argue with a very well covered 12.2% yield.

Especially when the company also has some of the lowest leverage in the industry

and a very attractive valuation.

The Power of Multiple Cash Flow Streams

Since inception (1/1/2016), the CFK Income Portfolio has generated a total return* of 50.8% (verse 27.8% for the S&P 500 and 35.7% for the Russell 2000). This was accomplished while also producing this very attractive, steady income stream.

*verified by Etrade.

The primary goal of the Income Portfolio is to produce a steady income stream in the 7% - 9% range. By focusing on underlying cash flows, and overlaying sound money management strategy, we seek to produce a steady long-term income flow to fund retirement and/or distribution reinvestment. Cash Flow Kingdom, "The Place where Cash is King".

Disclosure: I am/we are long CPLP.

Additional disclosure: This article discusses investment in the volatile shipping sector. I do not know your goals, risk tolerance, or particular situation; therefore, I cannot recommend any specific investment to you. Please do your own additional due diligence.