Originally Posted by Alex in Virginia
I'm looking at the latest NMM cash flow statement for the first 9 months of 2012.
Net cash provided by operating activities was $115 million vs distributions of $79 million. So distribution coverage is 1.46x, which is more than good.
Cash raised from stock sales $69 million + net borrowings of $44 million = $113 million vs $110 million put into new ships and investments to keep the distributions growing.
So from that statement I don't see (as you seem to) NMM in the process of liquidating, or burning cash to prop up a distribution. My take-away is very different.
There's a very similar picture when I look at the annual cash flow statements for the 3 years 2009 - 2011.
Over those 3 years, net cash provided by operating activities was $304 million vs $206 million in distributions paid. That's a distribution coverage of 1.48x.
From 2009 - 2011, cash raised from stock sales plus net borrowings totalled $562 million vs capital investments of $637 million (with another $75 million of cash on hand applied to those investments).
And at the end of 2011, the company had $20 million cash more than it had at the beginning of 2009.
Other financial ratios look just as good to me. At its current stock price, what I see is a 12%-plus dividend payer with very healthy financials. (As I keep saying, in my humble opinion income statements are very misleading and one should give much more credence to cash flow statements.)
As to the decline in NMM's stock price since 2007... what I see is that it's because NMM's stock price has been wittled down over the last 6 years that its steady dividend has kept getting more and more attractive. I only wish I had room in my portfolio to buy more.
Alex in Virginia
Liquidating the company has nothing to do with if they can cash coverage the dividend...
When you are depreciating the assets that make you income and do not set aside money to replace those assets when they no longer will make you income, that is liquidating the company...
I would hate to think that they would borrow money to pay a dividend.... that would be even worse...