CPLP - Capital Product Partners: Ambitious Plans And Undermining Risks

2024-02-23 11:46:10 ET

Summary

• Capital Product Partners operates in the LNG carrier and container ship segments and plans to expand its LNG fleet.
• CPLP has an adequate capital structure with 151% Total Debt/Equity and 62.6% Total Liabilities/Total Assets. The company delivers 72.1% gross profit margin, 68.3% EBITDA margin, and 5.21% ROE.
• CPLP distributes dividends with a mediocre yield of 3.31%. The market values dearly CPLP plans for fleet expansion; the company trades at 100% P/NAV.
• There are better opportunities at lower prices and with higher yields. I prefer a pure-play company like CLCO, FLNG, or DLNG to get exposure to LNG.

Introduction

Capital Product Partners ( CPLP ) operates in two segments: LNG carriers and container ships. The company owns nine LNG carriers with 174,000 cbm capacity, equipped with X-DF/ME-Ga propulsion. Besides that, it owns 15 container vessels of various sizes. CPLP has ambitious plans to expand its LNG fleet. The company has ordered eleven new ships with ME-GA engines. The first one took delivery in January 2024.

CPLP has an adequate capital structure with 151% Total Debt/Equity and 62.6% Total Liabilities/Total Assets. The company delivers 72.1% gross profit margin, 68.3% EBITDA margin, and 5.21% ROE. CPLP distributes dividends with a mediocre yield of 3.31%. The market values dearly CPLP plans for fleet expansion; the company trades at 100% P/NAV....

For further details see: