Jefferies Raises Price Target on Diana Containerships (DCIX), Forecasts 30% Dividend Increase
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Price: $0.60 --0%
Rating Summary:
2 Buy, 2 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
2 Buy, 2 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reiterating its Buy rating on shares of Diana Containerships (NASDAQ: DCIX) and is raising its price target from $8 to $10 following the acquisition of two vessels.
The company reported it had agreed to purchase one 1995-built 4,750 teu Panamax and one 1996-built 4,750 teu Panamax for $30 million each yesterday. The firm estimates the acquisitions represent a cash on cash return of approximately 20 percent for the company.
Due to the significant cash flow return from the recent acquisitions, the firm is forecasting management will increase its dividend payout from $0.78 to $1.01 annually.
An analyst at Jefferies states, "Based on the Company's existing cash on hand and last month's announced signing of a $100 million revolving credit facility with RBS, we estimate Diana Containerships is likely to finance the two acquired ships using 75% debt financing. Consequently, and given Diana Containerships' conservative strategy, we believe additional near-term acquisitions are unlikely in the near-term as the Company integrates its four recently acquired assets."
Due to the new acquistions, Jefferies has raised its FY12 EPS and EBITDA estimates from $0.65 and $26.5 million to $0.76 and $36.1 million.
For an analyst ratings summary and ratings history on Diana Containerships click here. For more ratings news on Diana Containerships click here.
Shares of Diana Containerships closed at $6.29 yesterday.
The company reported it had agreed to purchase one 1995-built 4,750 teu Panamax and one 1996-built 4,750 teu Panamax for $30 million each yesterday. The firm estimates the acquisitions represent a cash on cash return of approximately 20 percent for the company.
Due to the significant cash flow return from the recent acquisitions, the firm is forecasting management will increase its dividend payout from $0.78 to $1.01 annually.
An analyst at Jefferies states, "Based on the Company's existing cash on hand and last month's announced signing of a $100 million revolving credit facility with RBS, we estimate Diana Containerships is likely to finance the two acquired ships using 75% debt financing. Consequently, and given Diana Containerships' conservative strategy, we believe additional near-term acquisitions are unlikely in the near-term as the Company integrates its four recently acquired assets."
Due to the new acquistions, Jefferies has raised its FY12 EPS and EBITDA estimates from $0.65 and $26.5 million to $0.76 and $36.1 million.
For an analyst ratings summary and ratings history on Diana Containerships click here. For more ratings news on Diana Containerships click here.
Shares of Diana Containerships closed at $6.29 yesterday.
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