High-Yield Panic: 3 High-Yield Shipping Preferred Stocks With Profitability Already Locked In For 2020
Published Mar 17, 2020 on Seeking Alpha

High-yield shipping preferred shares have been particularly hard hit in the recent coronavirus selloff.
This article looks at three deeply-discounted preferred stocks where 2020 profits are already locked in.
All three issuers have a focus on long-term leases to reduce risk. All have strong liquidity and no major near-term debt maturities.
A brief look at TNP.PF, GSL.PB and DLNG.PB.
While few sectors have escaped the coronavirus market plunge, high-yield shipping preferred stock issues have been especially hard hit. Many shipping preferred stocks are now trading at huge discounts to par while offering yields well in excess of 10%. This is true even for issues where the generous preferred stock dividends are not in jeopardy. This article highlights three such issues among the many that are being covered at my Panick High Yield Report service. While few companies are completely immune to the economic impact of coronavirus, these three are highly resistant. These three companies will all be profitable in 2020, with strong liquidity and no significant near term debt maturities.
1. TNP.PF
Tsakos Energy Navigation CUM PFD SER F (TNP.PF) has a 9.5% coupon and now yields 17.5% at a recent price of $13.58. TNP.PF switches to a floating rate of three-month LIBOR +6.54% if it is not called by 7/30/2028. See prospectus for additional details.
Strong liquidity always is important in troubled times and Tsakos Energy Navigation Limited (TNP) really loves to hoard cash. As of 9/30/2019, TNP had accumulated $177 million in cash. An additional $47 million in net cash (after repayment of related debt) was added by the 3/6/2020 sale of five tanker ships. That puts pro forma cash at $224 million.
That cash hoard should increase even more. Shipping tanker rates soared for Q4 2019 and part of Q1 2020 as many ships owned by Chinese shipping giant COSCO were kept out of service. These COSCO ships were penalized for shipping oil from Iran in violation of U.S. sanctions.... Read more