Seaspan (SSW) is a Stand Out in the Shipping Industry
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Year-to-date the water transportation industry is seriously underperforming the S&P 500 due to fears of a global economic slowdown and an abundance of dry-bulk ships in the market. However one stock in the sector could now be worth a hard look, especially given its attractive dividend yield, according to Barron's.
Jefferies analyst Douglas Macrinac highlights container shippers as one segment that stands out above the rest. He notes the groups has a better balance between supply and demand within the different types of fleets.
Seaspan (NYSE: SSW) is one stock strongly positioned in the field with 65 cargo ships, which are currently fully leased over the next seven years at fixed rates.
Seaspan has the youngest fleet among the industry and is scheduled to launch seven more new vessels by 2014, all of which are already leased for 10 to 12 years from launch date.
Shares of Seaspan are currently trading at 7.2 times its 2012 enterprise value/EBITDA, well below its average of 13.5 times. Shares of Seaspan have fallen 40 percent since their April highs and the company's dividend offers a 5.8 percent yield currently.
Back in 2008-2009, management slashed its dividend payout by over 75 percent in an effort to preserve cash. An analyst at Wells Fargo forecasts that Seaspan may raise its annual dividend payout from $0.75 to $1.00, pushing the yield up to 7.7 percent.
Jefferies analyst Douglas Macrinac highlights container shippers as one segment that stands out above the rest. He notes the groups has a better balance between supply and demand within the different types of fleets.
Seaspan (NYSE: SSW) is one stock strongly positioned in the field with 65 cargo ships, which are currently fully leased over the next seven years at fixed rates.
Seaspan has the youngest fleet among the industry and is scheduled to launch seven more new vessels by 2014, all of which are already leased for 10 to 12 years from launch date.
Shares of Seaspan are currently trading at 7.2 times its 2012 enterprise value/EBITDA, well below its average of 13.5 times. Shares of Seaspan have fallen 40 percent since their April highs and the company's dividend offers a 5.8 percent yield currently.
Back in 2008-2009, management slashed its dividend payout by over 75 percent in an effort to preserve cash. An analyst at Wells Fargo forecasts that Seaspan may raise its annual dividend payout from $0.75 to $1.00, pushing the yield up to 7.7 percent.
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