• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 3 hours Science: Only correct if it fits the popular narrative
  • 3 hours Crazy Stories From Round The World
  • 6 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 11 hours EU has already lost the Trump vs. EU Trade War
  • 1 day Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 4 hours China's Renewables Boom Hits the Wall
  • 1 day ''Err ... but Trump ...?'' *sniff
  • 6 hours Do The World's Energy Policies Make Sense?
  • 5 hours Forget out-of-date 'dirty oil' smear, Alberta moving to be world's cleanest oil industry
  • 5 hours Impeachment Nonsense
  • 1 day Tesla Launches Faster Third Generation Supercharger
  • 10 hours Water, Trump, and Israel’s National Security
  • 1 day Passerby doused with flammable liquid and set on fire by peaceful protesters

Breaking News:

Russia Plans To Boost Crude Oil Exports

Alt Text

Chevron To Buy Anadarko In $33B Deal

Chevron announced that it has…

Alt Text

Should Chevron Walk Away From The Anadarko Deal?

Chevron and Occidental are facing…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

Pick Up Shipping Stocks for the Dividend

The markets are currently stampeding for yield of any description, damn the risk.

That’s why shipping stocks have suddenly come into focus, which offer some of the highest dividend yields on the board.

Nordic American Tanker (NAT) has a bounteous 8.30% dividend, while Frontline Ltd. (FRO) is offering positively stratospheric 10.20% yield. It would be a vast understatement to say this is an industry that is not without problems.

When commodity prices collapsed and international finance froze up, charter rates cratered. Overbuilding from the days when obtaining financing was as easy as, well, falling overboard, left a glut of hundreds of ships in mothballs in Singapore.

Unpredictable fuel prices also have profitability bouncing up and down like a yoyo.  Just take a look at the Baltic Dry Index ($BDI), a measure of spot rate for bulk carriers, whose chart looks like that of a lifeboat in a typhoon. Still interested?

I think the way to do this is not to reach for yield, and stay with companies that are more modest payers, but have firm contracts for bottoms for the foreseeable future.

That gives you a modest haircut on returns for a lot less risk, a better risk/reward ratio that I am always looking for.

Shippers that meet these specs include Overseas Shipholding Group (OSG), with a still healthy 5.10% dividend yield, and Teekay Shipping (TK), with a 4.80% return.

And I never thought I’d say this, but to avoid your single company risk you might consider buying calls on the BDI itself, as continuous Chinese buying of iron ore is expected to keep rates strong there for the rest of the year.

Courtesy: Mad Hedge Fund Trader




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play