Navios Maritime Partners (NMM) was trading at $18.62 in the beginning of 2014, while currently it has recorded a dip of 41.4% to trade at $11.21. Dividend yield for the company currently stands at 15.8% with the company recently paying a dividend of $0.4425 per common unit. The company believes that it has secured its dividend payouts.
Investors consider a dividend to be positive when the company has the ability to pay it on a longer term and when it is higher than the company’s earnings. In the latest quarter, NMM earned only $0.16 per share, and more than half of that $0.37 per share was in the form of an insurance settlement rather than from operations. Navios Maritime has only committed to pay out minimum distributions of $1.77 per unit through the end of 2015.
Navios Maritime Partners’ stock will likely drop in the upcoming quarters. Also, many of the company’s contracts are close to maturing, while a few contracts are priced higher than the current rates, which could lead to a risk in earnings recovery.
Adjusted net income estimates for fourth quarter 2014 stand at $16.3 million, as compared to $10.1 million in the corresponding periods last year. EBITDA is estimated at $43.1 million in the fourth quarter of 2014 compared to $36.3 million recorded in the year-ago quarter.
Based on the facts above, the company’s dividend paying capabilities are likely to be jeopardized. Thus, from an investor’s standpoint, Navios Maritime Partners may not be a safe income stream for stable quarterly dividend payouts.