Shares of this LNG shipping company have gotten crushed in recent weeks due to cyclicality of the business, uncertainty about new International Maritime Organization (“IMO”) Environmental Regulations, and an analyst warning about the risk of a distribution reduction. However, there are reasons to believe the market has dramatically overreacted and the dividend will still be very large and attractive (even after any speculated reduction). Rather than buying the shares outright, the premium income available in the options market is enormous and attractive.
GasLog Partners: Solid 14.1% Yield, Cyclical Sector, Preferreds Yield 8.5%
GasLog Partners has a history of paying and raising distributions consistently despite being part of the highly cyclical LNG shipping industry. The 14.2% distribution yield on the common shares is interesting (and so are the preferred shares), especially considering the likelihood of price appreciation. In this article, we review the health of the business, cash flow position, balance sheet flexibility, valuation, risks, dividend safety, and conclude with our opinion about investing in GasLog.