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General: Dividend Stocks

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  1.  
    • CommentAuthorRandall822
    • CommentTimeMay 26th 2007
     Report Post# 1
    Hello....I am just wondering why many analysts don't seem to mention a big dividend stock company like FRO (Frontline) which is a big oil tanker shipping company...and SFL (Ship Finance Intl)? FRO has a good track record and the stock price is high right now. I own this stock and here are a few examples of the past payouts:
    03-06-07 Spin Off 1.0840
    03-06-07 Cash Dividend 2.0500
    12-05-06 Cash Dividend 2.5000
    08-29-06 Cash Dividend 1.5000
    06-08-06 Cash Dividend 1.5000
    03-02-06 Spin Off 1.0240
    03-02-06 Cash Dividend 1.5000

    Is it because people see it as shipping companies are a possible big risk or something? Like terrorist may blow up a ship or whatever? With oil prices rising, these types of companies seem to do well. They have day rates and charter rate schemes. Anyways, any thoughts as to why you would or wouldn't own this type of company, would be helpful to me in future purchases of other companies of this nature.
    Randy
  2.  Report Post# 2
    I owned Frontline for a while as well -- I think the general concern is that the level of dividends is not sustainable. The big catalyst, the phaseout of single hull tankers, has already taken place, and the India/China boom in oil demand has already led to a huge order book for tankers that is significantly increasing supply over the coming years. At the same time, FRO's move to sell/lease back their ships to Ship Finance has been a large driver of the cash flow, which is really a one-time financial engineering windfall ... and it means that Frontline no longer has the book value of their vessels to fall back on as a bedrock valuation (shipping companies almost always were valued at something near the breakup value of their fleet -- except in shipping bull markets like we've seen over the past few years).

    That said, demand is so strong for oil transport that all the fears could come to naught -- and FRO is effectively much more leveraged to high spot rates than other tankers, so if they're right they'll continue to do much better. I am a big Fredriksen fan and own SeaDrill, partly because I think it will also be come a big dividend payer within a few years. One thing I really like is his tendency to own about a third of the common stock of his companies, not special stock classes, and to get his cash back through dividends that benefit all owners. In my opinion, and I haven't looked at any of these in detail for many months, FRO is the most leveraged tanker stock so should be the most volatile -- others like OSG or GMR or TK are likely to be steadier, but with less upside and lower dividend potential in general.

    Cheers,
    StockGumshoe
    • CommentAuthorRandall822
    • CommentTimeMay 26th 2007 edited
     Report Post# 3
    Hi Gumshoe.....Thanks for replying to my question about shipping companies and dividends. It will be interesting to see if FRO holds up. They have a quarterly report coming out at the end of the month. I own GMR and loved that $15 a share special dividend back in March.
    I also have/had OMM...but it just got bought out by TK andTRMD. So I am making money on that one by default. I will look into the other ones you mentioned. Right now I am also into Uranium a lot, and 'EMU' may be bought, anyday. So that will be okay as the price of that stock has risen quite a bit recently.
    I also forgot to say 'thanks' for putting the forum up and the work you do in tracking down those 'secret' expensive reports. It will be interesting to hear what others have to say about their ideas and experiences in the other sections.
    later,
    Randy
  5.  Report Post# 4
    Gumshoe,,,,,

    Thanks again for this forum...I am getting ready for Tuesday, and the Seadrill looks very interesting! Up 5 1/2% on Friday, and a double over the past several months.....We need to sluth these out before the big moves! lol
    Your analysis regarding FRO and other high dividend stocks is right on the money! Everyone reading this forum should be aware that every stock investment is both speculative and relates to Risk Management. If a stock or fund is paying over 10% in interest or a dividend, we as investors will likely be taking a higher level of risk. Otherwise, everyone would own PCU and FRO and other big dividend payers. The history of these stocks tells the story: at times, they suspend or reduce their dividends. Further, sometimes the reason their dividend is so high is because the stock has corrected. Watch out!
    On a bullish note, it seems that many investors and money managers are chasing dividends these days. The popularity of DVY and SDY and other dividend indexes should continue, as investors remain cautious regarding the balance of 2007 and beyond.
  6.  Report Post# 5
    P.S. If you want a rock and roll dividend payer with reported "top of the line" management, check out the new FMT. While I do not own it, they apparently have sold off their subprime business and will be concentrating on a new plan with Gerald J. Ford as part of the management team. The chart speaks for itself,,,,,this has been a trading stock, not for the faint of heart or someone who wants a guaranteed dividend. However, it reportedly has been paying 4.8% as a dividend (based on what price, we all ask,,,,,). Buying at 5 and sell north of 9 has worked well the past few months. Anyone playing this one?
    • CommentAuthorrammer
    • CommentTimeMay 27th 2007
     Report Post# 6
    Advantedges...appreciate the guidance...but can't find Seadrill. Sound interesting...can you help with the ticker?
  9.  Report Post# 7
    SeaDrill's primary listing is in Oslo -- on Yahoo Finance it's SDRL.OL, or you can usually get it on the pink sheets at SFRLF.PK, the volume isn't very high so on days when the stock is doing relatively well you often have to bid 1-2% above the Oslo close to get a fill on the pink sheets. Volume in Oslo is very high and it's one of the larger companies in that market, so if you can trade there it might be worth it (didn't NASDAQ just buy the Nordic exchanges? Maybe that will help in the future).
    • CommentAuthorgfmranger
    • CommentTimeSep 28th 2007
     Report Post# 8
    Speaking of dividends, I just got another teaser from Stansberry about what he calls "Dividend Grabber". According to him companies are paying special dividends up to 62%. The heading on the teaser was "Do you know about "Wall Street Bonus Checks".
    Anybody know anything about this?

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