How Does Navios Maritime’s Dividend Yield Compare?
Because Navios Maritime Partners (NMM) is an MLP, we’ll compare its dividend yield to the Alerian MLP Index (AMZ) and high-yield bond index (HYG). The Alerian MLP Index represents leading large-cap and mid-cap energy MLPs.
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Comparing dividend yields
As the above graph shows, Navios Partners’ dividend yield has reached an all-time high of 44%, which is based on the dividend for the next four quarters. It reached its highest point of 41% in 2008 when the broader market was doing very poorly, spooking investors after the Lehman Brothers crisis. For the rest of 2008 and 2009, the dividend yield peaked in the range of 20%–25%. While NMM can still cover its dividends, the market is factoring in more and more bearish scenarios given the record lows reached by the BDI (Baltic Dry Index) on a regular basis.
NMM’s yield is much higher than that of the broad MLP universe and energy MLPs. NMM’s current yield is 4.0 times the yields of the Alerian MLP Index and the BoFA Merrill Lynch US High Yield Index.
Considering market risk
While the market risk factor is expected to continue weighing on the stock prices of dry bulk companies such as Safe Bulkers (SB), Scorpio Bulkers (SALT), Diana Shipping (DSX), and Navios Maritime Partners, investors should note that NMM’s share price did rebound ahead of the other stock price bottoms reached in 2008. Investors should assess the probability of the stock price going up or down and position themselves accordingly.