Are you drawn to dividends and don’t believe in peace? You’ll like this company with a 10.6% yield
A small Singaporean shipping company pays shareholders everything it earns, and a yield of over 10% is enticing at first glance. But this dividend is recalculated every three months. And the worst news for the company may be the news the whole world is waiting for.
Key points
A small Singaporean shipping company pays out all its net income to shareholders, and its yield over the past year reached 10.6%.
The dividend is not declared in advance but calculated using a formula that changes every three months depending on debt levels.
The quarterly payout jumped from 0.22 to 0.95 USD per share in just one year, and the November figure could be a record.
The company sells 18-year-old ships at prices that exceed what it pays for newbuilds.
The conversion price of recently issued bonds is only a quarter above the current share price.
A company almost no one has in their portfolio, yet it pays out everything it earns
BW LPG $BWLP is the world’s largest owner of giant liquefied petroleum gas carriers, known as VLGCs. A fleet of around fifty ships, headquarters in Singapore, Norwegian roots, shares listed in Oslo and, since 2024, on the New York Stock Exchange as well. Its market value is around 3.7 billion USD, its shares traded at 24.70 USD after markets closed on October 16, and they have roughly doubled in price over the past twelve months.
And yet most investors overlook it. Shipping is a dull, cyclical sector, the company is small by US standards, and you won’t find any artificial intelligence story here. The result is a P/E of around 8, a valuation for businesses the market doesn’t trust to sustain their earnings.
Where does that 10.6% come from? A simple sum. Over the past four quarters, the company paid 0.40, 0.57, 0.67 and 0.95 USD per share, for a total of 2.59 USD. At a share price of around 24.5 USD, that works out to a yield of more than 10%. But this sum has one crucial characteristic: it describes the past, not the future.