Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| This
Solid Shipping Stock Yields 10.4% |
Published: April 3,
2007
Snapshot:
Formed in 2005, Eagle Bulk Shipping (Nasdaq: EGLE) is one of the
largest dry bulk carriers in the U.S. Its fleet of 22 vessels carries
iron ore, coal, grain, cement, and fertilizer to China and around the
world. Eagle leases its vessels to operators under one- to three-year
contracts. These short to medium-term contracts provide stable cash flow
and dividends, but also allow the company to benefit from rising freight
rates as the contracts rollover. The firm's modern fleet has an average
age of just six to seven years, allowing Eagle to keep maintenance costs
down and get top dollar for its shipping services.
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Dividend:
Management's stated policy is to pay out almost all its cash flow in the
form of dividends to shareholders. Based on the last two quarterly
dividends of $0.51 per share, the stock pays an annual distribution of
$2.04 per share and offers a hefty dividend yield of 10.4% at today's
share price.
As a new company that's been aggressively building its fleet, Eagle has
poured huge amounts of cash into buying new vessels. As a result, its
dividend payout ratio is currently over 100%. We expect that to move
lower as its new ships are delivered and start contributing to earnings.
The company does have a dividend reinvestment plan available for
shareholders. For details, you can contact 1-800-962-4284 ext 3780.
Growth: Eagle has spent nearly $500 million building
its dry bulk fleet over the past year and a half. It recently purchased
three ships, scheduled for delivery over the next few months, which will
be operated under one and two-year contracts at today's strong market
rates. Management estimates that these three charters alone are worth
about $50 million in total revenue. Another two vessels are currently
being built for delivery over the next two years. A recent common stock
offering helped fund the acquisitions, leaving the company with a sound
balance sheet and ample liquidity for future acquisitions.
Outlook: The outlook for dry bulk carriers like
Eagle is bullish right now. Earnings are forecast to grow an estimated
+13% next year, based on new vessels coming down the pipe and continued
strength in the dry bulk market. With 97% of its projected earnings
already locked up under fixed-rate contracts in 2007 and 53% in 2008,
Eagle is relatively insulated from volatile freight rates.
The shares have surged approximately +50% over the past year, about five
times more than the S&P 500. A recent issue of 5.4 million shares
priced at $18.95 per share raised millions to help fund recent
purchases, but it may have placed a near-term ceiling on the share
price. Still, trading at less than 14 times next year's projected
earnings, the stock is fairly priced, especially considering its
double-digit dividend yield.
Action To Take ---> Given
its aggressive growth strategy and shorter-term contracts, we consider
EGLE a moderate to higher-risk security. Over the long-term, the stock
should provide investors with an increasing income stream, but not
without some near-term volatility.
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Editor's
Note: Carla Pasternak's model portfolios focus exclusively
on investment opportunities with ultra-high yields. In fact, in each
of her monthly High-Yield Investing newsletters she
provides readers with an entire portfolio of stocks, funds and
preferreds that are delivering annual dividend yields of +10% or
more. That's right -- in order to even be considered for
inclusion in this portfolio, an investment
must deliver cash payments of at least 10% per year. Visit
this link to learn more about Carla Pasternak's High-Yield
Investing newsletter.
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Good investing!
Carla Pasternak
Editor
High-Yield Investing
http://www.StreetAuthority.com
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Investing. |
Carla
Pasternak draws on a variety of financial backgrounds to make profitable
calls on income-generating stocks for her readers.
Carla has
been employed in the investment industry for more than two decades. In
addition to her work as a writer for several other nationally recognized
financial publishers, her previous experience includes a position as
President of a well-respected investor relations firm. She has also been
writing shareholder reports for public companies (annual reports,
speeches, corporate profiles, slide shows, etc.) since 1980.
A highly
successful investment analyst, Carla specializes in high-yield,
income-paying stocks. In that pursuit, she's always mindful to select
companies that not only pay rich dividends, but that also have the
potential to deliver strong long-term capital gains.
On the
educational front, Carla holds both MBA and Ph.D. degrees. When she's
not watching the market, she's teaching business courses at the college
level and managing several million dollars in portfolio assets.
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