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Dynagas Preferred Is The Lowest Risk Way I Can Think Of To Make A 10% Yield

Published Fri, 23 Nov 2018 15:35:52 -0500 on Seeking Alpha

Dynagas LNG (DLNG) is an LNG shipping company somewhat similar to Teekay LNG (TGP) which leases out its ships to other companies.
Source: Dynagas investor presentation
Dynagas also recently issued fixed-to-floating preferred (DLNG.PB), similar to the the Teekay LNG fixed-to-floating preferred (TGP.PB) I wrote about in, "The Least Risky Way I Know Of To Make 9%."
Both Dynagas and Teekay LNG primarily own LNG ships which they lease out to some of the same customers (Dynagas however is much smaller than Teekay LNG). Both also enjoy a strong underlying macro environment:

Source: Dynagas investor presentation
A worldwide secular shift towards LNG production, transport and usage is well underway. With Cash Flow Kingdom identifying, investing in, and continuing to follow a number of equities which benefit from this trend.
More recently, the strong demand for LNG ships can also be seen in high LNG shipping spot rates,

Source: Fearnley Weekly Report
As well as Yamal LNG requesting early delivery and initiation of shipping contracts from both Dynagas and Teekay. Likewise both TGP and DLNG also enjoy predominantly long-term contracts with other solid counterparties.
Dynagas:

Source: Dynagas Presentation
Teekay LNG:
Source: Teekay LNG Presentation
Where they differ however is while TGP has already moved to a self-funding model, DLNG has yet to make that choice. TGP's 14¢ distribution in Q3 (4.4% yield... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
USA COMPRESSION PARTNERS LP 16.59   0.0 -0.10 2.10 13.04
ARCHROCK 10.62   25.3 0.42 0.58 5.49
TEEKAY LNG PARTNERS LP 16.05   29.2 0.55 0.76 4.78

USA COMPRESSION PARTNERS LP - USAC
USA COMPRESSION PARTNERS LP - USAC  


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