Safe Bulkers Confirms Dividend Payment with Positive Outlook

November 17, 2024 11:25 AM PST | By Team Kalkine Media

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Safe Bulkers Confirms Dividend Payment with Positive Outlook — Image source: Shutterstock

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Safe Bulkers affirms dividend with positive outlook for shareholders

Dividend sustainability appears strong despite past fluctuations

Earnings growth signals potential for future dividend increases

Safe Bulkers Declares Dividend Payment

Safe Bulkers, Inc. (NYSE:SB) has announced a dividend payout of $0.05 per share, set for distribution on December 17. This move represents a modest boost to shareholders' returns, with a dividend yield of 4.7%. Despite the lower yield, the company's ability to maintain consistent payouts provides a sense of stability for income-focused investors.

Strong Earnings Support Dividend Sustainability

While the dividend yield remains on the lower side, the key to evaluating its long-term sustainability lies in Safe Bulkers' earnings performance. Prior to the announcement, the company's earnings more than covered the dividend, although free cash flows were in the negative. This highlights the importance of focusing on cash flow sustainability, which could impact the dividend in the future. However, with earnings per share (EPS) expected to grow, the dividend payout ratio is forecast to remain sustainable in the near term.

Earnings Growth Enhances Future Dividend Potential

Safe Bulkers has demonstrated impressive earnings growth, with EPS increasing steadily in recent years. Over the past five years, the company has achieved a robust 55% annual growth rate in EPS. As earnings continue to grow, the likelihood of increased dividends becomes more probable. Given the low payout ratio, the company is well-positioned to increase its dividend in the future, enhancing value for shareholders. The combination of growing earnings and a sustainable payout ratio reflects positively on the company's long-term dividend outlook.

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