ATHENS - Global Ship Lease, Inc. (NYSE:GSL), an owner and charterer of containerships, has announced the introduction of a quarterly supplemental dividend for its common shareholders, signaling strong performance in the containership charter market. The company, incorporated in the Marshall Islands, will add a dividend of $0.075 per Class A common share to its existing quarterly dividend of $0.375, marking a 20% increase. This additional dividend is slated to start after the second quarter earnings release in 2024.
Thomas Lister, the Chief Executive Officer of Global Ship Lease, attributed the decision to the recent market conditions which have resulted in higher-than-expected cash flows from time charters with extended durations. He emphasized the company's disciplined capital allocation approach and its readiness to share the benefits of the earnings uplift with shareholders.
The supplemental dividend is expected to be sustainable for at least the next several quarters, according to the company's forward visibility. However, the continuation of this additional dividend will be reviewed periodically.
Global Ship Lease has a diversified fleet of 68 containerships, with capacities ranging from 2,207 to 11,040 TEU and a total capacity of 375,406 TEU. As of March 31, 2024, the company's contracted revenue stood at $1.59 billion on a TEU-weighted basis, with an average remaining charter term of 1.9 years. When including options under charterers' control, the contracted revenue reached $1.96 billion.
InvestingPro Insights
Amidst the robust performance and the announcement of an increased dividend, Global Ship Lease (GSL) exhibits solid financial metrics that underline the company's strong position in the containership charter market. With a market capitalization of approximately $1.02 billion USD and a strikingly low P/E ratio of 3.24, GSL's financial health appears robust. The adjusted P/E ratio for the last twelve months as of Q1 2024 further emphasizes this point, sitting at an even lower 2.89.
InvestingPro Tips highlight that GSL has not only a perfect Piotroski Score of 9, which suggests sound fiscal health, but also boasts high shareholder yield. The company has consistently raised its dividend for 3 consecutive years, reflecting a commitment to returning value to shareholders. Additionally, the company's gross profit margins have been impressive, reaching 69.85% in the last twelve months as of Q1 2024. These figures may provide investors with confidence in the company's ability to sustain and potentially grow its dividend payouts.
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Moreover, the company's share price is hovering near its 52-week high, indicating a strong market sentiment. With a dividend yield of 5.24% as of May 23, 2024, GSL stands out as a potentially attractive option for income-seeking investors. The company's ability to generate significant returns, as evidenced by a one-year price total return of 70.75%, further complements the positive outlook for those considering adding GSL to their investment portfolios.
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