Global Ship Lease (GSL) has given yet another payout on its preferred shares, having declared the 32nd consecutive dividend on them since 2014.
The Ian Webber-led owner of 65 container ships on Wednesday issued a return of $0.546875 per depositary share for this year’s second quarter, each representing a 1% interest in its 8.75% perpetual preferred shares.
The shares, which are also cumulative and redeemable, trade on the New York Stock Exchange as “Series B Preferred Shares” under the ticker symbol GSLPrB.
New York-listed GSL started declaring quarterly dividends on these shares in September 2014 for the second half of that year’s third quarter with an initial payout of $0.24913 per share.
Since then, London-based GSL has paid a quarterly return of $0.54675 per share on the preferred units.
Dividends on preferred shares are paid at a fixed rate, unlike common-share dividends, but shareholders have no recourse if a company decides to withhold a preferred dividend, B Riley Financial analyst Liam Burke said.
“Not paying it would speak volumes on the potential financial health of a company,” he told TradeWinds.
GSL has given a common shareholder dividend of $0.25 per share for all four quarters of 2021 and a $0.375 payout for this year’s first quarter while enjoying substantial profits in a boxship market that has been booming since early 2021 as a result of Covid disruption.
For this year’s first quarter, it earned a profit of $70.2m versus $4.2m in earnings a year earlier.
Burke said a company’s board of directors and management consider paying a common dividend on a quarterly basis when it releases quarterly results.
GSL’s board is led by executive chairman George Youroukos.
“In GSL’s case, they have been very clear, they have plans to maintain its common dividend payout (yielding about 7%) at current levels and prioritise debt reduction,” Burke said.
