Danaos Corp (NYSE: DAC)

Sector: Industrials Industry: Marine Shipping CIK: 0001369241
Market Cap 1.99 Bn
P/B 0.54
P/E 4.27
P/S 1.93
ROIC (Qtr) 11.45
Div Yield % 2.38
Rev 1y % (Qtr) 1.78
Total Debt (Qtr) 752.53 Mn
Debt/Equity (Qtr) 0.20
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About

Danaos Corporation, also known as DAC, is a leading international owner of container vessels and drybulk vessels. The company was established in 2

Investment thesis

Bull case

  • Strong operating cash flow of 621.90M provides robust 0.83x coverage of total debt 752.53M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 596.37M provide 7.72x coverage of short-term debt 77.29M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 621.90M provides strong 41.51x coverage of stock compensation 14.98M, indicating sustainable incentive practices.
  • Operating cash flow of 621.90M provides exceptional 16.28x coverage of interest expenses 38.20M, showing strong debt service capability.
  • Strong tangible asset base of 4.61B provides 6.13x coverage of total debt 752.53M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 621.90M barely covers its investment activities of (306.45M), with a coverage ratio of -2.03, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 621.90M provides thin coverage of dividend payments of (63.33M) with a -9.82 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 81.06M relative to inventory of 20.66M (3.92 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of 621.90M is outpaced by equity issuance of (100.83M) (-6.17 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 3.17B provide limited buffer against comprehensive income items of (66.85M), which is -47.48x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Marine Shipping
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KEX Kirby Corp 7.05 Bn 19.89 2.10 1.13 Bn
2 MATX Matson, Inc. 6.79 Bn 74.01 4.43 0.72 Bn
3 ZIM ZIM Integrated Shipping Services Ltd. 3.36 Bn 3.35 0.44 5.66 Bn
4 HAFN Hafnia Ltd 3.35 Bn 10.82 1.51 0.89 Bn
5 BWLP BW LPG Ltd 2.38 Bn 10.97 0.67 1.09 Bn
6 SBLK Star Bulk Carriers Corp. 2.37 Bn 245.30 3.42 1.23 Bn
7 CMRE Costamare Inc. 2.05 Bn 6.81 1.69 1.58 Bn
8 DAC Danaos Corp 1.99 Bn 4.27 1.93 0.75 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.48 0.60
EV to Cash from Ops. EV/CFO 3.55 6.07
EV to Debt EV to Debt 2.93 60.45
EV to EBIT EV/EBIT 4.37 4.74
EV to EBITDA EV/EBITDA 3.31 5.76
EV to Free Cash Flow [EV/FCF] EV/FCF 6.38 5.00
EV to Market Cap EV to Market Cap 1.11 29.59
EV to Revenue EV/Rev 2.13 2.00
Price to Book Value [P/B] P/B 0.54 1.07
Price to Earnings [P/E] P/E 4.27 13.80
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 7.38 2.47
Dividend Payout Ratio % Div Payout % (Qtr) 10.10 68.67
Dividend per Basic Share Div per Share (Qtr) 2.55 1.18
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 13.49 105.16
Interest Coverage Int. cover (Qtr) 13.23 -7.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 61.21 -33.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 55.17 25.96
Dividend Growth (1y) % Div 1y % (Qtr) -20.31 9.12
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -13.53 -27.24
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.72 -36.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -13.53 -26.39
EBT Growth (1y) % EBT 1y % (Qtr) -17.26 -36.07
EPS Growth (1y) % EPS 1y % (Qtr) -13.60 -30.68
FCF Growth (1y) % FCF 1y % (Qtr) 447.19 14.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.81 -7.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.22 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.08
Cash Ratio Cash Ratio (Qtr) 3.17 1.33
Current Ratio Curr Ratio (Qtr) 4.62 2.15
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 0.73
Interest Cover Ratio Int Coverage (Qtr) 13.23 -7.10
Times Interest Earned Times Interest Earned (Qtr) 13.23 -7.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 64.50 27.36
EBIT Margin % EBIT Margin % (Qtr) 48.85 17.95
EBT Margin % EBT Margin % (Qtr) 45.16 10.77
Gross Margin % Gross Margin % (Qtr) 74.00 37.00
Net Profit Margin % Net Margin % (Qtr) 45.20 9.28