They pay way to much for the ships and get very high leasebacks (income) in return, It will all come out in the wash. Third qtr, income (1.6mill) and depr (3.5mill) paid for 1/2 (15c of div). 30c div will not last, unless another public offering is done, there have been Three, $13.50, $7.50, and $6.25. (Gee whiz, guess the price of next PO?) I think the book value 247mill is exagerated.
I bot the shares for my IRA last year (under $5) and have done very well (re the Divs). I will continue to hold, even if the div cut to 15c, still a good return.
IMOP - buy under $5.50 - sell over $6.50
If you own this company you are making a bet that the world economy is mending and that shipping will expand and that the management of this company can play the game of buying new and used ships at low prices and position themselves to take advantage of the vagaries of the business. They express confidence in the market improving and I have confidence in management.
I think they can keep the dividend where it is or even better but even if they cut it 50% it still would be good. It is a gamble but not more so than Apple IMO. Apple relies on one product, the iPhone, to generate 70% of it's profit and to do so they have to maintain a high margin on that one product. That is true risk to me.
DCIX/DSX mgmt is one of the best/most conservative in the global shipping
sector. The mgmt will have a low threshold to reduce this current dividend
payout level. I agree with you that DCIX is still a good stock even if they
cut the dividend.
Yes, DCIX is similar to AAPL in so much they are both levered to one
main product or service. Both firm's margins are determined by market
forces rather then any single attribute that either firm can manipulate
at its discreation.
Hopefully over the mid to long term DCIX relationship with strong and
stable customers will prove profitable.
The current dividend is no more than a temporary mirage, which catches
the fast money's attention. They will be gone, I imagine, when a dividend
cut is announced. The real investable assets for DCIX is its
strong balance sheet, conservative operations and relationships with
major transport clients.
Listened to the last conference call to which management was questioned about the current dividend and stated that they were comfortable with it and were able to meet their financial commitments as such. So irrespective of bottomline earnings the company apparently is generating enough cash flow to pay it. Those who purchased shares should see good appreciation in the SP going into the next ex-dividend date. That's how I'm playing it.