Dynagas: The Virus Resistant High-Yield Preferred Stock And The Hated Common Stock
Published Feb 27, 2020 on Seeking Alpha

DLNG and DLNG.PB have sold off recently along with other LNG shippers due to coronavirus concerns and a warm winter.
Most DLNG revenues are locked in on long-term contracts. There's no impact to revenues from coronavirus or the warm winter.
DLNG.PB yields 11.2% and the DLNG common stock trades at a PE ratio of only 3.6X based on 2020 earnings analyst estimates.
The successful recent debt refinancing has reduced risk and lowered interest costs as DLNG strengthens its balance sheet.
DLNG has the potential for five years capital gains of about 240%.
Few issues are more hated in the shipping sector than Dynagas LNG Partners LP (DLNG). DLNG has lost nearly 90% of its value over the last three years as the dividend was cut and then eliminated altogether. Dynagas LNG Partners LP 8.75 SR B PFD UT (DLNG.PB) now yields 11.2% and trades at a substantial discount to par. DLNG and DLNG.PB are out of favor issues in an out of favor sector. The shipping LNG sector has been pummeled by reduced LNG demand this winter due to the coronavirus and warm weather.
Despite all off this negativity, DLNG now appears to be on track. A successful refinancing has reduced interest costs, removed uncertainly and ensures substantial debt reduction during the next five years. Revenues are locked in with long-term leases and will not be impacted by short-term issues including the coronavirus or the short-term LNG glut. DLNG now trades at just 3.6X 2020 analyst earnings estimates of 47 cents per share. DLNG has a market capitalization of only about $60 million and will be repaying $12 million in debt (20% of the current market capitalization) in debt every single quarter for the next five years. This article makes the positive case for both DLNG and DLNG.PB.
What is DLNG.PB?
DLNG.PB is a par $25 cumulative preferred issue with an initial fixed rate coupon of 8.75%. Dividends are paid quarterly and DLNG.PB now yields 11.2% at a recent price of $19.45. DLNG.PB is a perpetual... Read more