ESEA - Euroseas: Dividend Growth But Debt Surge Looms

2024-03-18 11:24:31 ET

Summary

• Euroseas, Ltd. is a container lessor listed on the NASDAQ with operational offices in Greece. Its stock price has risen 97 percent in the last year.
• The company owns 20 containerships and has six more orders for delivery in 2024, representing a 30 percent capacity increase (in TEUs).
• Euroseas expects to more than double its debt to finance its newbuild program.
• It has paid dividends in seven of the last eight quarters and has an active share repurchase program.

Investment Thesis

Euroseas' ( ESEA ) stock price is up 94 percent in the last year (as of March 18, 2024) and it recently posted Q4 2023 results. Revenues were $49.1 million , down 3 percent from Q3 but up 14 percent from Q4 2022. EPS (diluted) was $3.56, down 23 percent from the preceding quarter - but up 24 percent from Q4 2022. The company reported an average TCE of $29,266/day.

It declared a $0.60 dividend, which translates to an annualized yield of 7.1 percent, based on its Feb 21 closing price of $33.59. ESEA has paid out dividends in seven of the last eight quarters, with a payout ratio in the 11-17 percent range. The Q4 dividend was 20 percent higher than the previous quarter....

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