Genco Shipping & Trading (Buy, TP: USD27.00) - Over-the-cycle dividend generation
On our estimates, Genco is set to finish 2021 on a strong note, with the first dividend under its new strategy only one quarter away. However, prepayments could hamper near-term dividend potential, in our view trading short-term gains for over-the-cycle dividend generation down the road. Assuming prepayments of USD35m per annum, we estimate an average dividend yield of 22% for 2022–2023e and remain constructive on the outlook despite recent headwinds. We reiterate our BUY with a trimmed target price of USD27.0 (27.2).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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