My High Dividend Stocks Blog

My High Dividend Stocks
This is my high dividend stocks site where I help site members find high dividend stocks with earning power and strong balance sheets.

Safe Bulkers (SB) 7.82% dividend yield remains safe and on sale at $7.80 per share

Safe Bulkers (SB) remains on sale at $7.80 per share.  The company pays a $0.15 quarterly dividend that is safe.  The dividend yield for this high dividend stock is 7.82%.  The company has a five year average earning power of $1.50 per share.  And its balance sheet is good, but it could be improved upon.  I think it will improve once a few of its new-build ships begin operating over the next year.

The fundamentals are solid and have not changed.  Follow this link to read many recent articles on Safe Bulkers fundamentals:

http://www.myhighdividendstocks.com/category/high-dividend-stocks/sb

The technicals look good for market timing: http://bit.ly/3rySBchart

·         The continuous commodity indicator (CCI) is in negative territory.  The CCI tends to bottom at stock bottoms.

·         The stock price is barely below the 50 week moving average.  I like buying when the 50 week is below the 200 week moving average, but Safe Bulkers hasn’t been around for 200 weeks yet. 

·         The stock price is also sliding down the lower Bollinger Band.  Stock price bottoms tend to happen when the stock price jumps off the bottom Bollinger Band. 

·         I use the moving average convergence divergence indicator as a confirming indicator.  The MACD is a momentum oscillator based on the difference between two exponential moving averages.  See http://bit.ly/ChartSchool for a through explanation on each of these technical analysis terms.

You have a good reason to be concerned if you are only going to make a onetime purchase of SB.  This stock will go down if the S&P 500 goes down in reaction to a global double dip recession.  Dry bulk shipping moves the commodities that are necessary in a booming global economy.  A renewal of the global economic bust will drop dry bulk shipping stocks even though SB has long term contracts in place to whether the economic storm.  That will make it an extreme bargain with a huge dividend yield like in 2008 when the stock went below $3.00 per share temporarily.

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Video - Boyden Recommends Safe Bulkers (SB), Diana Shipping, Navios

You know I liked Safe Bulkers (SB) above $8.00 per share.  I really like it lately because the market participants are knocking the price down for no apparent reason.  There is a sale going on for the high dividend stock Safe Bulkers.  SB closed today at $7.70.  This makes no sense.

Yes, the Baltic dry index is meandering lower due to tons of new capsize ships entering service.  But all of Safe Bulkers capsizes are on long term contracts.  Only two of their 16 ships are the capsizes.  And they only have two more on the way out of about 11 new ships.  Even their unfinished capsizes are on contract for much higher prices than the low numbers being talked about in the video.

The dividend is safe and yielding 7.8% and climbing as the stock price goes 1% lower today.  The company has five year average earning power of $1.50 per share (easily enough to cover the $0.15 quarterly dividend).  It also has a good balance sheet.  So, I don’t believe me.  Well watch this video to hear it from someone else who is an analyst for some Wall Street firm.

Boyden Recommends Safe Bulkers, Diana Shipping, Navios

May 17 (Bloomberg) -- Natasha Boyden, an analyst with Cantor Fitzgerald LP, talks about her investment strategy for shipping industry stocks and her recommendations of Safe Bulkers Inc., Diana Shipping Inc. and Navios Maritime Acquisition Corp. shares. Boyden speaks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg) (/Bloomberg)

Here is the video link in case the embedded video code doesn’t work: http://www.washingtonpost.com/business/boyden-recommends-safe-bulkers-diana-shipping-navios/2011/05/17/AF7Z925G_video.html#

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Most FED officials prefer raising interest rates prior to selling their MBS. How would this affect AGNC?

Of course most Federal Reserve officials would prefer to raise interest rates rather than sell toxic mortgage backed securities.  Nobody in their right mind would pay full face value for those toxic MBS.  The Fed knows this and it is already suffering a public relations crisis.  It doesn’t want the public to know how ineffectual their actions have been since late 2008.

They will also find that raising the Fed Funds Rate will be pushing on a string.  The commercial bankers have over $1.3 trillion in excess reserves in their digital vaults.  They are not loaning money to each other overnight at the Fed Funds Rate to meet reserve requirements (duh! Because they have $1.3 trillion in excess RESERVES.)  The Federal Reserve could raise this rate to 20% and nothing would happen.  Actually something would happen.  People would notice that the Fed is not in control of all interest rates like they were taught.

If the Federal Reserve does sell toxic MBS into the market, then that is very bad for high dividend stocks like American Capital Agency Corp. (AGNC) and other mortgage REITs.  There would be an increased supply of MBS for sale and no new demand at the old prices.  Prices of MBS would go down.  The asset value of AGNC’s MBS portfolio would go down.  If the Fed flooded the market with enough MBS, then it is even possible that AGNC would have to sell some agency MBS to satisfy margin calls for its repurchase agreements.  Leverage is a two way street.

The interest rates that the Fed doesn’t control are going to rise and that will hurt AGNC’s net income derived from the spread of various interest rates.  AGNC will lose money if interest rate yield curves invert (that would be a signal of a double dip recession).  Enjoy the high dividend yields while they last because lower future asset values and rising interest rates are going to torpedo AGNC’s investment prospects.

Disclosure: I don’t own AGNC and I don’t plan on owning it ever.

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(Reuters) - Most Federal Reserve officials prefer to raise benchmark interest rates before selling assets when the time comes to tighten policy, minutes of their April meeting showed on Wednesday.

During an extensive discussion of how the central bank might pull back its massive support for the world's largest economy, officials agreed they would eventual shrink the Fed's much expanded portfolio over the medium term, and that getting rid of mortgage-related debt would be a priority.

"A majority of participants preferred that sales of agency securities come after the first increase in the (Fed's) target for short-term interest rates," the Fed said.

"And many of those participants also expressed a preference that the sales proceed relatively gradually, returning (Fed holdings) to all Treasury securities over perhaps five years," the minutes said.

Discussion of the removal of monetary stimulus should not be seen as an indication the Fed is ready to start down that road any time soon, policy makers said.

(Reporting by Mark Felsenthal; Editing by Neil Stempleman)

Safe Bulkers (SB) goes ex-dividend tomorrow yielding 7.2%

NEW YORK (TheStreet) -- The ex-dividend date for Safe Bulkers (NYSE:SB) is tomorrow, May 18, 2011. Owners of shares as of market close today will be eligible for a dividend of 15 cents per share. At a price of $8.09 as of 9:32 a.m. ET, the dividend yield is 7.2%.

The average volume for Safe Bulkers has been 251,600 shares per day over the past 30 days. Safe Bulkers has a market cap of $586.9 million and is part of the services sector and transportation industry. Shares are down 6.5% year to date as of the close of trading on Monday.

Safe Bulkers, Inc. provides marine drybulk transportation services worldwide. The company transports various bulk cargoes, such as coal, grain, and iron ore. The company has a P/E ratio of 4.8, below the average transportation industry P/E ratio of 5.2 and below the S&P 500 P/E ratio of 17.7.

Original link: http://www.thestreet.com/story/11121943/1/safe-bulkers-stock-to-go-ex-dividend-tomorrow-sb.html

Disclosure: I don’t own Safe Bulkers now, but I intend to in the future months.

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AGNC hires two investment executives from the failed Freddie Mac and Bear Stearns.

The executives at American Capital Agency Corp. know that interest rates are going to skyrocket in the not so distant future.  So they have hired some ex-Freddie Mac executives to help them game the system until it can no longer be gamed.  There is nothing wrong with that.  Caveat emptor "buyer beware".  I would not be proud to hire people at the failed Freddie Mac or Bear, Stearns & Co.  I wish them success, but I know that AGNC and its high dividend stock buddies in the mortgage REIT sector are a house of leveraged cards that will crumble at the beginnings of an inverted interest rate curve.
 
Why not hire some guys from Enron's risk management department?  How could they do any worse than Freddie Mac and Bear Stearns.  Hiring collosal risk management failures is just plain stupid.  I would avoid AGNC just for their hiring practices.
 
Here are the links to the wikipedia entries for Freddie Mac and Bear Stearns if you can stomach the financial insanity of these dead corporations:
 
 
BETHESDA, Md., May 16, 2011 /PRNewswire/ -- American Capital Agency Management, LLC, the external manager of American Capital Agency Corp. (Nasdaq: AGNC), announced today that Peter J. Federico and M. Song Jo are joining the company.
 
Mr. Federico will join as Senior Vice President and Chief Risk Officer and will be responsible for overseeing all risk management activities relating to AGNC.  Mr. Federico was previously Executive Vice President and Treasurer of Freddie Mac, primarily responsible for managing that company's investment activities for its retained portfolio and developing, implementing and managing risk mitigation strategies.  He was also responsible for managing Freddie Mac's $1.2 trillion interest rate derivative portfolio and short and long-term debt issuance programs.  Mr. Federico previously served in several other capacities at Freddie Mac, including Senior Vice President, Asset & Liability Management.  Mr. Federico joined Freddie Mac in 1988.
 
Mr. Jo joined American Capital Agency Management as Vice President, Mortgage Structuring.  He previously served as Vice President, Mortgage Structuring, Investment & Capital Markets at Freddie Mac, where he was primarily responsible for managing mortgage structuring activities, including creating, managing and trading structured activities to enhance that entity's risk, return and liquidity profile.  Mr. Jo served Freddie Mac in various other capacities from 1997 to 2010.  He previously worked at Alex. Brown & Sons and Bear, Stearns & Co. Inc.
 
"We are excited about expanding our investment team with seasoned professionals," commented Gary Kain, President, American Capital Agency Management, LLC.  "Peter and Song both have extensive experience in investing, trading and managing risk associated with mortgage-backed securities.  Prior to joining us, Peter spent most of his 20 year career involved in the management of one of the largest interest rate derivative portfolios in the world.  We believe that his extensive experience in asset/liability management will further our efforts to generate attractive risk adjusted returns for American Capital Agency Corp. over a wide range of economic environments and interest rate scenarios," he added.
 
"In addition, Song's experience analyzing and executing Agency REMIC transactions at Freddie Mac will significantly enhance our ability to use mortgage structuring to supplement American Capital Agency Corp.'s returns and develop alternative funding strategies," Mr. Kain continued.  "We continue to build the strongest possible investment team with the necessary skills and industry experience to help us enable American Capital Agency Corp. to capitalize on the wealth of opportunities within the agency mortgage market, while appropriately managing risk."
 
 
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What to do when a high dividend stock attempts a significant acquistion of another company.

Keep away from high dividend stocks that you don't understand.  I started analysis on Exelon (EXC) before several merger and acquistion proposals were reported in the financial press.  Now I know that I'm not going to be able to understand the dividend record, earning power, or strength of balance sheet of the combined companies.
 
I thought that Exelon Corp was shaping up to be an excellent high dividend stock when I discovered it a few weeks ago, but then they decided to buy Constellation Energy Group (CEG).  I know little to nothing about CEG, so now I'm a bit hesitant to spend much time analyzing Exelon.  This is unfortunate because I wanted to analyze Exelon so my readers would have some good analysis of a high dividend utility stock.
 
What really irks me is that they need the permission of third-party bureaucrats to acquire another company.  If the CEG merger wasn't enough - now they are attempting another acquisition only this time much smaller.  Again, they need bureaucratic permission.    EXC doesn't expect to be granted approval until the third quarter of 2011.  This is more proof that I don't live in a free, capitalist country.
 
The company that Exelon seeks to merge with is doing its own acquisitions.  All of this makes analysis of Exelon not worth the effort.
 
I'm taking Exelon off my watch list until all this merger and acquisition occurs.  I will reevaluate the new company once they start paying dividends.  Stay away from high dividend stocks that are attempting to acquire one or more companies if you don't clearly understand how the new company will make profits and their capitalization structure.  You might have to sell one of your high dividend stock favorites when they decide to propose an acquistion.  There have been many colossal acquisition blunders (e.g. Time Warner buying AOL).  Don't let a high dividend blind you to a horrible acquistion that will lose the company money.
 
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By Tess Stynes and Naureen S. Malik
   Of DOW JONES NEWSWIRES

Exelon Corp. (EXC) said Thursday it has agreed to purchase a north Texas natural-gas fired plant from Sequent Wolf Hollow LLC in a $305 million deal.

The move follows Exelon's planned $7.8 billion acquisition of Constellation Energy Group Inc. (CEG) that was unveiled last month. That deal puts Exelon--the largest operator of nuclear plants in the U.S.--in position to resuscitate some nuclear developments abandoned by Constellation because they were too costly.

When the deal between the two power companies was announced, executives said that matching Exelon's large merchant business, which sells electricity on the wholesale market, with Constellation's retail business, which markets directly to consumers, was a key driver for the deal.

Separately, Constellation on Thursday agreed to acquire MXenergy, a Connecticut supplier of natural gas and electricity, for $175 million. MXenergy has more than a half million customers in 15 states and two Canadian provinces. Constellation expects the move to supplement its growing retail business, especially in the residential market. MXenergy shareholders Denham Capital Management, Charterhouse Group LLC and Sempra Energy Trading LLC support the deal.

Exelon said the acquisition of the Texas plant will expand its clean-energy portfolio in anticipation of coming clean-air regulations. "This is not a needle mover," William Von Hoene, executive vice president of finance and legal at Exelon, said during the Deutsche Bank Securities alternative energy, utilities and power conference Thursday afternoon.

The Wolf Hollow acquisition is expected to close in the third quarter upon regulatory approval.

It also expands the company's presence in Texas, where Exelon already owns and operates three gas-fired plants and where Constellation also has generation assets. Hoene said Wolf Hollow "will be modestly accretive to cash flows in 2012 and neutral to earnings near-term."

Exelon last month reported first-quarter earnings fell 11% amid hedging losses and other charges, though revenue was up due to higher prices and unusually cold weather in Texas.

Shares of Exelon closed 1.1% higher at $42, while Constellation also advanced 1.1% to $37.07.

-By Naureen S. Malik and Tess Stynes, Dow Jones Newswires; 212-416-4210; naureen.malik@dowjones.com

 

You enjoy movies at Regal's theaters, but should you buy this high dividend stock?

 
I recently read an article that listed Regal Entertainment Group (RGC) as a high dividend stock targeted by short sellers.  I hadn't seen Regal on my previous high dividend stock screens, so I was curious to put this stock with my Benjamin Graham inspired mechanical tests.  The bottom line is that the short sellers are probably right.  RGC is not a movie you want in your portfolio at $13.96 per share.  However, what price might Regal become a value basis for investment?
 
Regal Entertainment group (RGC)
Market price: $13.96
Shares: 154.56 M
 
Dividend record: quarterly dividend of $0.18 since Q1 2009, dividend was $0.30 per quarter for years before that.
Dividend yield: 6.02%
Quarterly dividend: $0.21
Dividend payout ratio: 168% (BAD $0.84/$0.50)
 
Earning power:  5 yr. average earning power is $0.95/share; 10 yr. average earning power is $0.76 per share
(earnings adjusted for changes in capitalization)
                EPS          Net inc.         Adj. EPS
2006    $0.56     $86.3 M        $0.56
2007    $2.28     $363.0 M     $2.35
2008    $0.72     $112.2 M      $0.73
2009    $0.62     $95.5 M        $0.62
2010    $0.50     $77.6 M       $0.50
 
I suggest that you try to buy value stocks at below 12 times average earnings.  Regal would have to fall below $11.40 to qualify as a value stock based on its five year average earnings of $0.95/share.  It would become speculative above 20 times average earnings at $19.00.  It still qualifies as an investment basis since it is in between those two extremes.
 
If you take the 10 year view of Regal's earning power, then you get the same result but with a lower average earning power.  The company averaged $118.1 M net income over 10 years.  Divide that average by 154.56 M shares and you get a 10 year average earning power of $0.76/share.  The share price would have to drop to $9.17 to qualify as a value basis (12 times 10 yr. average earnings/share).  It would become speculative at 20 times average earnings/share at $15.20.  I usually like to use the 10 year average earnings when possible to buy low in the value territory.
 
Balance sheet:  This company has a troubling balance sheet.  No wonder short sellers are betting against the company.
Book value per share: -$3.17  (BAD)
Price to book value: -4.4 (BAD)
Current ratio: 0.74 (less than 2.0 is BAD)
Quick ratio: 0.64 (less than 1.0 is BAD)
Shareholder equity: is negative and keeps getting worse.  This is reflected in the negative book value per share.
 
I give Regal Entertainment Group two thumbs down at $13.96 per share.  A dividend cut is likely.  The company has a 10 year average earning power of $0.76 per share.  And its balance sheet is scarier than most horror films that it plays in its theaters.  The short sellers are justified to bet against Regal.  I would put Regal on your watch list at $9.17, but even then its negative book value and current/quick ratios should give you pause.
 
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Large bank debt is frequently a sign of weakness. Safe Bulkers (SB) vs. AGNC.

Large bank debt due shortly is frequently a sign of weakness.  I’m comparing two of the stocks that I’ve been analyzing the most: Safe Bulkers (SB) and American Capital Agency Corp. (AGNC).  Both are high dividend stocks.  SB yields about 7.4% and AGNC yields a whopping 19%.  See how each of them deals with their short term debts.

Safe Bulkers (SB) looks like it is financially sound.  Safe Bulkers (SB) has $28.6 million in short term debt as of Q1 2011.  Short term debts were $8.2 million in 2006.  It has $53.2 million in total current liabilities.    Total current liabilities were $172 million in 2006.  Short term debt is on a slight uptrend, but total current liabilities are in a five year downtrend.  Safe Bulkers has an annual net income of about $109 million.  It can pay down the debts it owns with the money the business earns and continue to pay its high dividend (even in the beaten down dry-bulk shipping market; shipping rates have plummeted since 2008).  The same can’t be said of AGNC.

American Capital Agency Corp. (AGNC) is not financially sound because it is leveraged 7-9 times and like a bank it is borrowed short (through repurchase agreements due in 30-180 days) and lent long (agency securities).  AGNC has $21.9 billion in short term debt according to the company’s latest quarterly report.  The company’s total current liabilities is virtually the same as its short term debts.  AGNC has an annual net income of about $288 million.

You can see the huge difference between AGNC’s short term debt and net income due to their leverage.  I expect the company’s net income to decrease in the next year or so due to rising short term interest rates.

The point is that AGNC does not payback its short term debts with the money it earns.  Its dividend payment is also in jeopardy.  It issues more stock to raise capital and it rolls over its debts.  The music stops when the financial institutions refuse to rollover its short term debts (credit crisis) or they charge higher rates for short term borrowings (rising interest rates).

I will not invest in banks, mortgage REITs, and insurance companies for this reason.  They are too opaque and difficult to understand their asset values.  The details of the business operations are also difficult to understand.  Don’t be charmed by their siren’s song of a whopping dividend yield or you may find a portion of your dividend portfolio smashed upon the rocks when the interest rate yield curve inverts.

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Large Bank Debt Frequently a Sign of Weakness. Financial difficulties are almost always heralded by the presence of bank loans or of other debt due in a short time. In other words, it is rare for a weak financial position to be created solely by ordinary trade accounts payable. This does not mean that bank debt is a bad sign in itself; the use of a reasonable amount of bank credit —particularly for seasonal needs—is not only legitimate but even desirable. But, whenever the statement shows Notes or Bills Payable, the analyst will subject the financial picture to a somewhat closer scrutiny than in cases where there is a “clean” balance sheet.

The postwar boom in 1919 was marked by an enormous expansion of industrial inventories carried at high prices and financed largely by bank loans. The 1920–1921 collapse of commodity prices made these industrial bank loans a major problem. But the depression of the 1930’s had different characteristics. Industrial borrowings in 1929 had been remarkably small, due first to the absence of commodity or inventory speculation and secondly to the huge sales of stock to provide additional working capital. (Naturally there were exceptions, such as, notably, Anaconda Copper Mining Company which owed $35,000,000 to banks at the end of 1929, increased to $70,500,000 three years later.) The large bank borrowings were shown more frequently by the railroads and public utilities. These were contracted to pay for property additions or to meet maturing debt or—in the case of some railways—to carry unearned fixed charges. The expectation in all these cases was that the bank loans would be refunded by permanent financing; but in many instances such refinancing proved impossible, and receivership resulted. The collapse of the Insull system of public-utility holding companies was precipitated in this way.

Terra Nitrogen's dividend increased 255% this quarter. What's up with that?

Terra Nitrogen (TNH) reported stellar earnings today and the company announced a much higher dividend payment for the first quarter.  But will that much higher dividend payment be the new norm for Terra Nitrogen.  The RTTNews article below makes it sound like TNH will up their quarterly dividend from $1.36 per common unit (share) to $4.84 per common unit.  That is an unbelievable 255% dividend rate increase.

Terra Nitrogen Co. L.P. (TNH: News ) said Thursday its first-quarter profit rose from the prior year, due to higher ammonia and urea ammonium nitrate selling prices and volumes.  For the quarter, net earnings to common units grew to $$66.6 million or $3.60 per common unit from $$32.9 million or $1.78 per common unit a year earlier.  Results for the quarter included an unrealized non-cash mark-to-market gain on natural gas derivatives of $1.2 million.  Net sales for quarter were $196.0 million, up from $118.8 million last year. This increase was due to higher ammonia and urea ammonium nitrate selling prices and volumes.  The increase in prices, the company said, resulted from an improved global supply/demand balance for nitrogen products and higher expected crop plantings in North America.  Additionally, the company said its Board has declared a quarterly cash distribution of $4.84 per common limited partnership unit payable May 27 to holders of May 16.  Terra Nitrogen Co. L.P. produces and distributes nitrogen fertilizer products to agricultural and industrial customers.

Link to original article: http://www.rttnews.com/Content/QuickFacts.aspx?Node=B1&Id=1616708

That sounded too good to be true so I did a little digging.  I went searching for the company's earnings press release for today to see if Terra Nitrogen said it was increasing their quarterly dividend to $4.84.  Morningstar.com has the company's short press release: http://news.morningstar.com/all/ViewNews.aspx?article=/BW/20110505007332_univ.xml

In TNH's press release on Morningstar I read the following concerning the dividend increase:

TNCLP reported today that its Board of Directors has declared a cash distribution for the quarter ended March 31, 2011, of $4.84 per common limited partnership unit payable May 27, 2011, to holders of record as of May 16, 2011.

Cash distributions depend on TNCLP's earnings, which can be affected by nitrogen fertilizer selling prices, natural gas costs, seasonal demand, production levels and weather, as well as cash requirements for working capital needs and capital expenditures. Cash distributions per limited partnership unit also vary based on increasing amounts allocable to the General Partner when cumulative distributions exceed targeted levels.

Announced distributions for the first quarter of 2011 exceed distributions in the previous and year-ago quarters due to higher net earnings allocable to common units and a one-time working capital benefit associated with implementing the previously announced new operating agreement with CF Industries. With this distribution, TNCLP cumulative distributions continue to exceed targeted levels.

That doesn't sound like they expect to keep the dividend payments at $4.84 per common unit per quarter in the future.  The company only earned $3.60 per common unit.  That makes this quarter's dividend payout ratio 134% and we all know that isn't sustainable.  But this will increase the yield for the year.

I have calculated in the past that Terra Nitrogen has a five year average earning power of $9.97 per common unit.  If the company can match this quarters results for the remainder of the year, then that average should be moving up at the end of the year.  The company is currently trading at 10.9 times it five year average earnings.  Any amount below 12 times average earnings is value territory.

The stock closed at $108.71 today, but it only has a book value of $11.35.  That sort of bothers me, but I haven't done the detailed analysis of their balance sheet yet justify my concern.  I like very low price to book values and this one is closer to 10.  I'm going to keep my eye on Terra Nitrogen to see if these earnings are just the result of higher prices and seasonality.  It makes sense to me that farmers by their fertilizers in the 1st quarter of the year.

I'm putting this stock on my watch list.

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Dahlman Rose and I like Safe Bulkers (SB); Dividend Yield 7.69% safe.

It is good to see Dahlman Rose likes Safe Bulkers dividend record, earning power, and balance sheet as much as I do.  Read yesterday’s post to see while supporting evidence for the statement above.

You are getting a buying opportunity right now with Safe Bulkers down $0.31 (-3.83%) at $7.79 as I write this.  The dividend yield is 7.69% at this price.

I perform fundamental analysis first and then I use a few technical analysis techniques for timing entries and exits.  Here is the chart that visualizes this buying opportunity: http://stockcharts.com/h-sc/ui?s=SB&p=W&b=5&g=0&id=p73304174446

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http://www.benzinga.com/analyst-ratings/analyst-color/11/05/1055842/dahlman-rose-reiterates-its-buy-on-safe-bulkers-followin

Safe Bulkers (NYSE: SB) reported 1Q11 EPS of $0.41, just ahead of Dahlman Rose and consensus estimates of $0.38. Net voyage revenues of $42.3MM compared to its $40.8MM forecast and slightly lower than expected opex and G&A contributed to the beat. The company declared its regular $0.15 dividend, which represents a 7.4% yield at the current share price. Safe Bulkers continues to be one of the very few shipowners with the ability to pay out dividends because of its strong balance sheet.

Safe Bulkers has secured time charters for 75% of its remaining 2011 operating days, compared to just above 50% for the peer group, and has contracted 59% of its 2012 operating days and 52% of its 2013 operating days. Safe Bulkers currently has one Capesize vessel in its fleet, which it has fixed on a long term time charter at $31,000/day until September and at $26,000/day for the remainder of the charter.

Cash earnings per share was $0.50 per share in 1Q11 and 2011 CEPS is estimated at $1.93. Therefore, the $0.60 dividend is well-protected and the company's excess cash flow affords it flexibility as the dry bulk market remains pressured. Dahlman believes Safe Bulkers will continue to be very well-positioned in the coming years, despite a weak dry bulk market, and look for its shares to outperform. Dahlman Rose reiterates its Buy rating and $10 target.

SB closed Tuesday at $8.10

Read more: http://www.benzinga.com/analyst-ratings/analyst-color/11/05/1055842/dahlman-rose-reiterates-its-buy-on-safe-bulkers-followin#ixzz1LPDfdUet