High Dividend Payout Will Sustain For FLY Leasing

FLY Leasing (NYSE: FLY), which is engaged in purchasing and leasing commercial aircraft under multi-year contracts to various airlines worldwide, has a dividend payout of $1 per share and a current dividend yield of 7.2%. This article discusses the key reasons to believe that this dividend yield will sustain, and the other positive reasons to consider exposure to FLY.As of September 2014, FLY had a portfolio of 121 aircraft that have been leased to 67 airlines in 37 countries. For YTD14, FLY recorded operating revenue of $306.4 million, as compared to YTD13 revenue of $284 million. For the same period, the company recorded an operating cash flow of $172 million, as compared to $135 million in the prior-year comparable period.I mentioned at the outset that FLY's dividend payout is sustainable. The first reason for believing that the payout will sustain is its current lease term of 4.9 years. The remaining lease term ensures that the company's revenue and cash flow remain stable in the coming years. This will keep the dividend stable as well.It is also important to note that FLY has embarked on an aggressive fleet improvement plan that involves the sale of older aircraft and purchase of a young fleet. In 2014, FLY has sold 8 aircraft with an average age of 12.6 years, and the company has acquired 21 aircraft with an average age of 2.6 years and an average lease term of 8.8 years. The company will also be acquiring three new aircraft with a remaining lease term of 11.4 years,... Read more

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