• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 15 minutes WTI @ 67.50, charts show $62.50 next
  • 14 hours The EU Loses The Principles On Which It Was Built
  • 6 hours Starvation, horror in Venezuela
  • 9 hours Why hydrogen economics does not work
  • 7 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 6 hours Tesla Faces 3 Lawsuits Over “Funding Secured” Tweet
  • 2 hours Mike Shellman's musings on "Cartoon of the Week"
  • 19 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 1 day Chinese EV Startup Nio Files for $1.8 billion IPO
  • 7 hours Saudi Fund Wants to Take Tesla Private?
  • 23 hours Crude Price going to $62.50
  • 2 hours California Solar Mandate Based on False Facts
  • 2 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 18 hours Saudi Arabia Cuts Diplomatic Ties with Canada
Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Alt Text

Yieldcos Are Back And Better Than Ever

Yieldcos have had a rocky…

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

Trending Discussions

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




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News