DryShip Shares Higher on Dividends and Buybacks, Stock up 30%

DryShip

The announcement of dividend and share buybacks enhanced the share price of DryShip Inc (NASDAQ:DRYS) more than 20% in today’s trade. DRYS share price has had the most shocking 52-week trading range of $0.93 – $5,685.39.

DryShip was one of the most prominent market laggards last year.  DRYS stock lost almost 99% of the value over the previous twelve months. Following the today’s rally, the stock currently trades around $3.50 a share.

DryShip

Source Image: finviz.com

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DryShip Dividend and Share Buybacks Strengthened Traders Sentiments

The company announced the dividend of 2.4 cents per share payable on March 8, 2018. The aggregate payments for the dividend will be around $2.5 million. The announcement represents the company’s confidence in its cash generation potential and future fundamentals.

The company added to traders sentiments by announcing a massive share buyback program of $50 million in the next twelve months.

DryShips plans to repurchase outstanding shares in the open-market or privately negotiated purchases following applicable security laws and regulations. The company has 104,274,708 outstanding shares at present.

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Improving Fundamentals Offered The Room For Cash Returns

The company posted revenues of $58 million in the past nine months, significantly higher from $42 million in the same period last year.

Its average number of dry bulk vessels enlarged to 21.8 compared to a year-ago period of 19.7, and fleet utilization rose to 100% from 75%.

However, higher expenses and finance costs had increased its losses in the past nine months from the prior year. Depreciation expense, higher interest, and finance costs impacted the profitability of the company.

Traders are currently focusing on the company’s potential to increase the revenue. It also added four new tanker vessels on average, with 100% utilization and 368 voyage days.

At the end of the latest quarter, DryShip’s cash and equivalents came at $25.9M. Moreover, the book value of its vessels, including advances, stands around $786.5M in the previous quarter. DryShip has also refinanced a new loan facility secured by assets in the last quarter, which will improve its investment potential in the coming days.

Featured Image: dryships.com