The Company is engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership and operation of bulk carrier vessels.
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I am a big fan of this stock. I ran through a number of shipping stocks, all of which were loaded down with debt and had poor equity and asset returns, as well as profit margins. But Diana shipping has solid margins, stopped its dividend as the global financial crisis was growing, built up a hoard of cash, and has weathered the storm well overall. Of course, it has taken a hit, but is in dramatically better shape than its competitors. If Diana can do this in a horrible market for shippers, it should be very successful when the inevitable global recovery/baltic dry index recovery takes place. A return of the $3.31 in dividends it paid in 2008 before it stopped its dividend is also an attractive prospect. DCIX is another stock to consider, as it shares the same management and was spun off from DSX, but it has a very short track record, so I opted to invest in DSX despite the dividend DCIX offers. A resolution of the Greek crisis might provide a boost to this stock.
I agree that DSX is a good, solid, well run company and have owned it in the past.
Right now, however, I have it on my watchlist, and am waiting for a little better start price for a longer term hold.
I don't think the company itself will do anything to bring the price down, but one of these days we are going to get another "schitzo" market when everything falls, and then I will go back in.
I think you are passing on a great value stock in DCIX, especially with this recent drop from their run up.
The only negative thing on the horizon, if indeed it turns out to be negative, is their need to re-charter one of their 2010 built vessesls this year, and they may have to do it at a lower rate; but that is not a given.
Their other charters don't end until 2013 or 2014, and they have what is probably the strongest balance sheet in the shipping business today.
They are very underpriced right now because of light volume, dominated by day traders, and the lack of readily available current data on the financial sites.
This week they paused in their upward movement, and have even retreated to a great buyin price.
They will have a conference call near the end of Feb., which will give you a chance to see where they actually are now and will be in the intermediate future.
Of course, the price will likely be higher at that time.
Since most of the institutional investors are in at about $7.50, and the book value is in the $8.50 to $9.00 range, they have more upside to come, in addition to the dividend.
JMO and worth exactly what I am charging for it.
Thanks for the info, Teacherman1, I'll keep that in mind regarding DCIX. Should be heading for some better years for shipping in general soon after these last few.
Expect a dividend in the future but not $3.31...Those were the heydays of shipping. Rates will not go to their 2008 highs again for a VERY long time.
Thanks for the comment, definitely true, as they currently have 128 million in net income and 82.6 million shares outstanding. $1 a year would be ~65% payout ratio. But I would hazard that even with a few contracts that are at the rates of 2007, right now Diana shipping is in worse shape than on average contract wise. Just as 11,500 was artificially high for the Baltic Dry Index, 650 is far too low, and I would hope to see a correction between shipping volume available and cargo. This should improve in the next 5 years (along with a global economic recovery) and Diana's competitive standpoint is improving. While I don't expect $3.31 to come back anytime soon, a robust dividend should be possible with a few years.