Favorable Dry Bulk market Outlook Intact, Albeit with Volatility. While overall TCE rates have dropped recently due to weather disruptions and seasonality and the forward cover is low, the outlook remains favorable. Volatility is likely to continue, and seasonality should be expected. At the same time, the order book remains muted, and the January 1, 2023 implementation of new carbon emission regulations (EEXI) could trigger slow steaming that effectively lowers supply.Entering 2022 on Solid Footing and Well Positioned to Ramp Up Dividends. Several milestones were achieved over the past several years and the moves enhanced the competitive position moving into this year. The fleet renewal program improved the fleet profile, a global refinancing simplified the capital structure, and the shift in the capital allocation strategy to variable dividends should add shareholder value.Fine tuning 2021-2 EBITDA and dividend estimates. Forward cover of 71% of 4Q2021 days booked at ~$36.9k/day creates a solid base and the quarter should be strong even though rates weakened towards yearend. Our EBITDA estimate is $109.2 million in 4Q2021 based on TCE rates of $36.0k/day. Our 4Q2021 dividend estimate of $0.80/share equates to a payout ratio of ~38% on our 4Q2021 EPS estimate of $2.12/share. Our 2022 EBITDA estimate is $249.4 million based on TCE rates of $23.1k/day, and our 2022 dividend estimate of $3.25/share equates to a payout ratio of ~80% on our 2022 EPS estimate of $4.06/share.Other shareholder friendly moves ahead? We applaud the new dividend strategy and believe that other moves are likely, including buy backs, given moderating financial leverage. Primary focus appears to be on maintaining/growing asset base, but a strong asset market and lingering stock price weakness could trigger a pivot away from acquisitions. Recent weakness creates good opportunity. Maintain Outperform rating and price target of $28/share. The recent successes include record operating results, a global refinancing and the shift to variable dividends. Plus, an expanded and balanced fleet positions GNK to capitalize on attractive, albeit volatile, dry bulk market fundamentals. We view drops of 21% in 4Q2021 and 5% in 1Q2022 as unwarranted and believe that the current valuation and risk/reward profile remain very attractive. Read More >>