SBLK - Star Bulk Q2 Preview: Rich Payouts Ahead As TCE Rates Remain High

2024-07-08 09:00:00 ET

Summary

• SBLK's investment thesis remains compelling with rich forward dividend yields of 12%, as the EU commences their rate cuts and the US likely not far behind.
• On the other hand, the management has guided higher dry docking expenses, with it potentially being a bottom-line drag while impacting the FQ2'24 variable dividend payouts.
• Even so, we believe that FQ3'24 is likely bringing forth higher TCE spot rates, thanks to the unusually robust iron ore and coal trades through East.
• These developments may sustain SBLK's deleveraging efforts of "paying down $250 million in debt a year" while allowing it to pay out rich dividends ahead.
• We will also highlight a few metrics to look out for in the upcoming FQ2'24 earnings call in August 01, 2024, with it underscoring the health of SBLK's business and near-term prospects.

We previously covered Star Bulk Carriers ( SBLK ) in April 2024, discussing why it remained a viable dividend investment thesis, with the higher TCE rates likely to boost its adj EBITDA generation and eventually, its quarterly dividend payouts through Q3'24....

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