Ship Finance International Limited
Dividend Yield: 9.5%
While many doubted the longevity of the rally when it first started, the Baltic Dry Index has held onto the bulk of its doubling in value over the past three months. We’ve also seen ship-scrappage rates fall, prices of used dry-bulk vessels rise and building-capacity tumble, all within the last few weeks.
Put all those clues together, and it looks like the maritime shipping industry is finally poised for a recovery now that supply and demand are lining up.
That’s good news for Ship Finance International Limited (SFL), which own a fleet of 61 vessels and oil rigs. As the Baltic Dry Index increases in value, the price at which the company can lease/charter those boats also expands, widening margins.
The current dividend yield of 9.5% is solid as is, but as the older — and lower-revenue — charter contracts expire and are replaced by stronger deals, look for most of that revenue improvement to land on the company’s bottom line … and eventually in shareholders’ pockets in form of bigger dividends.