Singapore Shipping Corp

[guru]

Hi GG,

Up 3.5c (15%) as I was typing this....
I was thinking that the recent acquisition will be used to fund the S$ dividend payments while the FCF generated from the 2 RO-RO charters will be used to fund further ship purchases.

OCK has stated that he intends to build up the fleet after his earlier divestment in '05-07 if memories serve me right.

My feel is that the dividend will be kept at 1c while he continues to build up the fleet to increase the revenue and profit.

Appreciate forumers' comment on this counter too. Cheers

From a fundamental perspective, there is still room for Sp Ship to rerate.

Sp Ship is paying out S$0.01 on earnings of US$0.0139 implying at payout ratio of around 59% (60% if one round up).

Given the earnings accretion from the acquisition and the stability of the acquired earnings; assuming a similar payout, there is every reason to expect a hike in DPS to S$0.015.

Using 5% div yield on the potential higher payout, S$0.30 is not a wild target for Sp Ship.

Vested