Wednesday, October 06, 2021
Eagle Bulk Shipping (EGLE)
Capital Allocation Shifts to Dividends
Eagle Bulk Shipping Inc. is a US-based drybulk owner-operator focused on the Supramax/Ultramax mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in size; these vessels are equipped with onboard cranes allowing for the self-loading and unloading of cargoes, a feature which distinguishes them from the larger classes of drybulk vessels and provides for greatly enhanced flexibility and versatility- both with respect to cargo diversity and port accessibility. The Company transports a broad range of major and minor bulk cargoes around the world, including coal, grain, ore, pet coke, cement, and fertilizer. Eagle operates out of three offices, Stamford (headquarters), Singapore, and Hamburg, and performs all aspects of vessel management in-house including: commercial, operational, technical, and strategic.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Management call highlighted global refinancing, variable dividend and buy back program. Catalyst for new capital allocation strategy was the global refinancing. Refinancing of high cost 8.25% bonds and all other debt with a new five-year term $300 million loan and a $100 million revolver saves $8 million/year and sets the stage for new variable dividend policy.
New variable dividend starting this quarter. Due to higher cash flow and declining financial leverage, a dividend policy will be instituted based on a simple and straightforward percent of net income. Quarterly dividend will equal a minimum of 30% of the previous quarter’s net income with a floor of $0.10/share. First dividend will be based on 3Q2021 results and paid in November. We estimate …
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
