Call today at 8:30am EST will discuss the new approach to capital allocation that shifts the focus to deleveraging the balance sheet and maximizing dividends. Number is 800-353-6461 and code is 7623966.Taking a second bite at the dividend apple and implementing variable dividend policy beginning in 1Q2022. Instead of a fixed quarterly dividend, the dividend will be declared every quarter and fluctuate based on operating results. Cash flow available for dividends will equal operating cash flow minus debt amortization, capex for drydocks and a reserve. The reserve target will be based on future quarterly debt amortization and interest expense and will be used for debt repayment, acquisitions and corporate purposes.Dividend scenarios look attractive. Based on TCE rates of $15.0k/day and TCE revenue of $211 million, operating cash flow could equal $107 million. After debt amortization of $21 million, capex for drydock of $11 million and a reserve of $28 million, cash flow available for dividends is estimated at $46 million, or $1.10/share. Higher TCE rates positively impacts cash flow available for dividends; each $2,50/day increase boosts available cash flow by $46 million, or $1.10/share. Please see page two for added details.Near-term focus has already shifted to delevering. In 1Q2021, debt dropped $48 million to $401 million and cash dropped $16 million to $164 million, or net debt of $237 million versus $270 million in 4Q2020. The yearend 2021 cash target is $75 million and operating cash flow and cash in excess of $75 million will be allocated to debt reduction over remainder of 2021.Maintain OUTPERFORM rating and price target of $16. The dry bulk market outlook remains favorable due to firming demand and low supply growth. We believe that the shift to a variable dividend policy will be well received, and the fleet renewal program, upside Cape optionality, and the recent increase in the public float are positives. While the stock has responded to firmer dry bulk market fundamentals and is up 71% this year, including 25% in April, we view the current risk/reward profile as favorable.Read More >>