I believe part of the move to fixed is that, with the VLCC mortgages coming due, the are going to have a decent amount of cash (or two ships!) coming in and as opposed to distributing, they are going to invest in some more product tankers (drop down anyone?). I would not expect dividend to move up at all for probably 5 years as any improvement in rates will buy more ships....think of it this way, they've basically told you you are not smart enough to reinvest so we'll do it for you!
I think it is too low to sell now. It is almost as low as the dip last Q when the div was .02. They are in strong financial shape and the market will improve as the world economy improves. I think it is a buy here but certainly not a short term trade. It is a long term value play and you get paid about 5% to wait. When earnings improve, the div will go up, but the div will not go down from here.
Nothing has changed that much. They changed their dividend policy to give them more flexibility in the short term. The primary purpose of the company remains to send money up to TK in the form of dividends. If you think the tanker market is going to recover, it is a great investment. If not, then it's still one of the safest ones available, given the support given to it by TK.
Why, if it's a short-term change doesn't it say as much? Frankly, if I wouldn't be taking a major loss I'd sell and move on to something I don't have to wait 5 years for (all the while praying TNK won't be the tanker company to fold, cause a few will) but since I'm relatively young, don't need the money now and don't want yet another embarrassing loss on my Tax Return. LOL I guess I'll hold. 960 a year dividend is not terrible but it sure ain't great when the price of everything has gone up. Medicines that cost me 60 a month in 2006 now cost me 189 a month. That's why I bought TNK, for the dividend. I guess the last great hope of beating the odds against us, equities, is now also a losing battle.