2Q2021 Results out AMC on August 4th and Investor Call at 8:30am EST on August 5th. The call number is 800-430-8332 and code is 8885406. Our 2Q2021 EBITDA estimate is $50.1 million based on TCE rates of $21.0k. We will look for color on: 1) Lagging Cape market and impact of efforts by China to curb inflation; 2) Visibility and tone of Supra/Ultra market; 3) Time charter opportunities; 4) Hedging activity; 5) M&A activity and the cost/timing of recent acquisitions; and 6) Variable dividend policy.Increasing 2021 EBITDA estimate to $200 million based on TCE rates of $20.2k/day, up from $184 million and TCE rates of $19.1k/day. 2Q2021 forward cover was high with Capes 72% booked at $24.9k/day and Ultras/Supras 76% booked at $17.8k/day so weighted toward 2H2021 estimates. Five time charters signed, but visibility limited.Our FY2022 dividend estimate increasing to $2.90/share from $2.70/share, or a potential current yield of ~15%. The dividend estimate is based on our higher 2022 EBITDA estimate of $215.5 million based on TCE rates of $21.7k/day, up from $197.8 million and TCE rates of $19.8k/day. Variable dividend policy begins in 1Q2022 and potential scenarios look attractive despite likely quarterly fluctuations based on the previous quarterly results.Ahead of plan and financial leverage already moderating. On May 31st, pro forma cash was $161 million, in line with $164 million in 1Q2021, but net debt dropped to ~$220 million on May 31st, down $17 million from $237 million in 1Q2021 and $70 million from $270 million in 4Q2020. Deleveraging plan is ahead of plan and net debt should drop into $134 million range in 4Q2021. Recent shelf filing adds flexibility to the tool kit and we see no indication that equity issuance is imminent given the current outlook and capital structure.Maintaining OUTPERFORM rating and increase price target to $28 from $25. The dry bulk market outlook remains favorable due to firming demand and low supply growth. The reception to a variable dividend policy is improving, and the fleet renewal program, upside Cape optionality, and higher public float are positives. While the stock has responded to firmer dry bulk market fundamentals and is up 138% this year, including 37% in 1Q2021, 87% in 2Q2021 and 10% in July, we view the current risk/reward profile and upside potential as attractive. Read More >>