Staying positive on dry bulk market. Even though dry bulk TCE rates remain volatile, the bias has been upward due to firm demand from infrastructure projects and global stimulus programs. Also, the order book remains muted, and the January 2023 implementation of new carbon emission regulations (EEXI) could trigger slow steaming that effectively lowers supply. Operating leverage has expanded, and a $1.0k/day change in TCE rates has ~$16 million impact, or ~7% of our 2022 EBITDA estimate.Increasing 2021 EBITDA estimate to $223 million based on TCE rates of $22.1k/day from $204 million and TCE rates of $20.8k/day. Current TCE rates are above high 3Q2021 forward cover (Capes 66% booked at $31.3k/day and Ultras/Supras 75% booked at $25.3k/day) so positive bias to estimates. Six time charters in place, but visibility is limited beyond one quarter out.Increasing FY2022 dividend estimate to $3.50/share from $3.05/share, which is driven by our higher 2022 EBITDA estimate of $236 million based on TCE rates of $22.3k/day, up from $226 million and TCE rates of $21.6k/day. Dividend estimate, which implies potential yield of 17%, is based on April framework, but clearer dividend guidance expected in November.Financial leverage moderating despite closing four of six acquisitions. Pro forma all transactions, the fleet will total 44, or 17 Capes, 15 Ultras and 12 Supras. Despite acquisitions, net debt should drop into $178 million range in 4Q2021 and $168 million range in 4Q2022. Recent shelf filing adds flexibility to the tool kit and no indication that equity issuance is imminent given the current outlook.Maintain OUTPERFORM rating and price target of $28. The dry bulk market outlook remains favorable due to firm demand and low supply growth. The reception to a variable dividend policy has improved, and the fleet renewal program, upside Cape optionality, and higher public float are positives. Even though the stock has fully recovered and is up 180% this year, including gains of 37% in 1Q2021, 87% in 2Q2021 and 9% in 3Q2021, we believe that current dry bulk market fundamentals are durable and think that the risk/reward profile remains very favorable. Read More >>