Paragon Shipping Inc.

Paragon Shipping Inc. (PRGN - Snapshot Report), a global drybulk shipper, on Aug 6 reported a record second quarter that beat Wall Street estimates by 19.51%. As a result of the great quarter, the company raised its dividend by 14.3%.

Net income for the quarter, excluding non-cash items, was 49 cents per share compared to 45 cents per share in the second quarter of 2007. Analysts expected 41 cents per share.

Time charter revenue jumped 196% to $40.6 million from $13.7 million in the second quarter of 2007. However, the company operated an average of 11 vessels during the second quarter of 2008 compared to 6 vessels a year ago.

The company saw the adjusted average time charter equivalent rate jump 33% year-over-year to $31,394 from $23,555.

Paragon Adding to Its Fleet

On Aug 5, PRGN took delivery of its 12th vessel, a 2008- built Supramax. It has already been chartered to Irika Shipping with a remaining period of approximately 10 to 12 months at a rate of $55,000 per day. Following the expiration of this charter, the vessel has been fixed to Dieulemar at $33,750 per day for a 58 to 62 month period.

2008 Time Charter is 100% Fixed

Paragon charters vessels for 1 to 5 year periods. The company has fixed 100% of its available fleet in 2008, 85% in 2009 and 55% in 2010.

PRGN Raises Second Quarter Dividend

On Aug 1, Paragon announced an increase in its dividend by 14.3% to 50 cents per share payable on Aug 28 for shareholders of record as of Aug 18. It paid 43.75 cents per share in the first quarter.

The company said the increase was the result of strong growth, as the fleet nearly doubled in size in the last year, and successful fixing of time charters over the past several months. PRGN's current dividend yield is 11.40%.

Solid Value Fundamentals

PRGN is a Zacks #1 Rank (Strong Buy) stock. The company is cheap, trading at 6.80x forward earnings. It has surprised on estimates 4 consecutive quarters by an average of 26.52%. Read the Apr 25 analysis.

[The author of this article owns shares of Paragon Shipping.]

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