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Star Bulk Carriers (SBLK) Announces New Share Repurchase Plan

Boosting its shareholders’ wealth, Star Bulk Carriers SBLK has disclosed a new share repurchase program, through which, it can buy back 10 million shares of its outstanding common stock on or before Oct 9, 2023. By indulging in share buybacks, a company effectively reduces the share count, in turn, boosting the share price.

To this end, the shipping company inked a repurchase agreement with OCM XL Holdings, LP. OCM XL is a limited partnership incorporated in the Cayman Islands. Under the agreement, SBLK is eligible to purchase 10 million of its common stock from OCM at $18.50 per share.

The buyback plan has been approved by SBLK’s board. It intends to fund the agreement by making use of the sale proceeds of vessels sold during the last six months.

Following the share buyback plan, the collective ownership of Oaktree Dry Bulk Holding LLC, an affiliate of OCM XL Holdings and its affiliated funds in SBLK, is likely to be reduced by 8% from approximately 25.2%. The agreement has also brought about other related changes.

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This new buyback plan apart, SBLK rewards its shareholders by paying quarterly dividends of 40 cents per share (annualized $1.60), giving an 8.56% yield at the current stock price. SBLK’s payout ratio is 46%, with a five-year dividend growth rate of 224.91%. (Check SBLK’s dividend history here.)

Zacks Rank & Key Picks

SBLK currently carries a Zacks Rank #3 (Hold).

Investors interested in the Zacks Transportation sector may consider stocks like Covenant Logistics CVLG and Air Canada ACDVF. While CVLG currently sports a Zacks Rank #1 (Strong Buy), ACDVF currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CVLG offers a portfolio of transportation and logistics services including asset-based expedited, dedicated and irregular route truckload capacity, asset-light warehousing, transportation management and freight brokerage capability.

CVLG’s cost-control efforts are commendable. The Zacks Consensus Estimate for 2023 earnings has revised 7.44% upward in the past 60 days.

An uptick is aiding Air Canada in passenger traffic. Recently, management announced plans to launch a new year-round route between Montreal and Madrid. The service will commence in May of the following year as part of its expanded international summer 2024 flying schedule to cater to increased demand.

The Zacks Consensus Estimate for current-year earnings has jumped 57.1% in the past 60 days. ACDVF has outshined the Zacks Consensus Estimate in two of the past four quarters (missing the mark in the other two).

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Star Bulk Carriers Corp. (SBLK) : Free Stock Analysis Report

Air Canada (ACDVF) : Free Stock Analysis Report

Covenant Logistics Group, Inc. (CVLG) : Free Stock Analysis Report

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Zacks Investment Research