UPDATE: Dahlman Rose Reiterates Buy Rating, Lowers PT on Diana Containerships
In a report published Monday, Dahlman Rose & Co. reiterated its Buy rating on Diana Containerships (NASDAQ: DCIX), but slightly lowered its price target from $9.00 to $8.00.
Dahlman Rose noted, “DCIX's reiterated dividend policy represents a $1.20 annual dividend and a 22% yield at the current stock price. The company's low financial leverage puts it in very good position for accretive acquisitions in the near term. We estimate 2013 operating CF per share at $0.91 based on the company's existing fleet, suggesting the $1.20 dividend is not sustainable. However, another acquisition like the APL Garnet would boost CF by $0.17/share and take its leverage from 27% to just 34%. We expect DCIX shares to gradually approach a 15% yield in the coming quarters and, as such, target $8 – down from $9 previously.”
Diana Containerships closed on Friday at $5.52.
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