Star Bulk Carriers is steadfast in returning long-term value to shareholders by declaring a dividend each and every quarter.
The New York-listed owner of 118 bulk carriers Wednesday night announced a threshold-driven quarterly dividend policy that began with a $0.05 bonus for the third quarter.
Star Bulk says it needs at least $1m in cash per ship to pay investors, but it's confident it can deliver.
"Look we've designed this dividend policy in order to be able to follow it for the long term," president Hamish Norton said during Thursday's third-quarter earnings call.
"We're pretty committed to sticking with this policy."
That minimum-cash threshold will rise every three months to $2.1m by the third quarter of 2021.
Investors will hopefully value Star Bulk shares appropriately in return for consistent payouts so the company can make even more money without ending the dividend, Norton said.
Such a scenario, he said, may allow Star Bulk to pay off its $1.61bn in debt and capital lease obligations, allowing for higher quarterly bonuses without paying taxes on interest costs.
"If we had no debt, we would be able to pay dividends in essentially any market condition," he said.
"And the dividends could be quite large because we have no tax."
He said unencumbered shipowners typically trade shares at the highest multiples of net asset value, allowing even higher dividends to shareholders.
"So that's our long-term vision," he said. "Let's hope we get there."
