For investors aiming to create a portfolio that produces steady passive income, a methodical selection process is necessary. One useful method focuses on finding companies that provide a good dividend now and also have the fundamental financial soundness to maintain and possibly increase those payments in the future. This method frequently uses filters that emphasize a high dividend rating, a combined score assessing yield, growth, and stability, while also setting basic standards for earnings and balance sheet condition. This confirms that selections are not only high-yield opportunities; they are solid enterprises with the profit capacity and financial structure to maintain their payouts to shareholders.
COSTAMARE INC (NYSE:CMRE) is a global owner and supplier of containerships and dry bulk vessels for charter. The company's fleet operates on major trade routes globally, earning income through long- and short-term charter contracts with liner companies. This operational structure gives some predictability to income, a basic component for stable dividend practices.
Dividend Attraction: High Yield with a Maintainable Structure
The main draw for income-oriented investors is CMRE's large dividend yield, which is notable in its sector and the wider market. Based on the fundamental analysis, the company's dividend traits make a strong argument.
- Good Yield: CMRE now provides a yearly dividend yield of 7.43%. This is much higher than the S&P 500 average of about 1.85% and is also better than the 6.89% average for the marine transportation sector.
- Maintainable Payout Ratio: A key measure for dividend durability is the payout ratio, which shows the part of profits given as dividends. CMRE's ratio is a cautious 26.30%, meaning the company keeps most of its earnings for new investment or lowering debt. This small ratio offers a good safety margin, showing the present dividend is easily supported by profits and not in near-term danger.
- Consistent History: The company has built a consistent history, having given dividends for at least ten straight years. This past action shows a dedication to giving capital back to shareholders across different market conditions.
Still, the report points out some points to think about. The dividend has had a small yearly increase rate and has gone down lately. Also, analysts expect that profit increase may lessen, which could pressure future dividend rises. For an investor who values high present income over fast dividend increase, CMRE's high initial yield and low payout ratio are the main favorable points.
Supporting Business Basics: Earnings and Balance Sheet Condition
A high dividend is only as reliable as the company behind it. This is why the selection method demands acceptable scores in earnings and balance sheet condition, to steer clear of companies that could be paying dividends from weak foundations. CMRE's fundamental report indicates it satisfies these supporting conditions.
Earnings Soundness: CMRE gets a good Earnings Rating of 7 out of 10. The company is regularly profitable, with positive profits and operating cash flow. Important efficiency measures are good:
- Its Return on Invested Capital (ROIC) of 10.84% is better than almost 89% of its sector competitors, showing efficient use of capital.
- Profit and Operating Margins are also very good compared to the sector, indicating the company's skill in turning revenue into profits.
Satisfactory Balance Sheet Condition: The company gets a Condition Rating of 5, showing a satisfactory financial state with some points to watch. The balance sheet shows reasonable debt with a Debt/Equity ratio of 0.65, which is less than many sector competitors. Importantly, the Debt to Free Cash Flow ratio is a sound 3.73, meaning the company could repay its debt in less than four years using its present cash flow, a signal of controllable debts. Liquidity measures, like the Current and Quick Ratios, are within ordinary limits, showing the company can handle its short-term responsibilities.
Price Assessment
From a price standpoint, CMRE seems low-cost. It trades at a Price-to-Earnings (P/E) ratio of only 6.05 and a Forward P/E of 5.70, which is low compared to both the wider market and most of its sector. This price assessment implies the market has accounted for the difficulties in the shipping industry, possibly giving a safety buffer for investors drawn to the high yield.
Is CMRE Suitable for a Dividend Portfolio?
COSTAMARE INC shows a standard profile for a specific kind of dividend investor: one looking for high present income from a company with a maintainable payout and good basic business operations. The high 7.4%+ yield is backed by good profitability, a cautious payout ratio, and a ten-year payment history. While dividend increase may be limited and the sector is variable, the selection conditions, focusing on dividend quality together with earnings and balance sheet condition, helps single out CMRE as a business with the ability to continue its payouts.
For investors using this methodical selection method, CMRE deserves more study. A complete look at its full Fundamental Analysis Report is advised to grasp all the detailed factors behind its scores.
This assessment of CMRE came from a structured filter for good dividend payers. Investors searching for more options that fit similar conditions of high dividend rating, satisfactory earnings, and balance sheet condition can view the complete list of outcomes by using the Best Dividend Stocks filter.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The information presented is based on data provided and should not be the sole basis for any investment decision. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
