Star Bulk Carriers Corp. (NASDAQ: SBLK)

Sector: Industrials Industry: Marine Shipping CIK: 0001386716
Market Cap 2.37 Bn
P/B 1.53
P/E 245.30
P/S 3.42
ROIC (Qtr) 3.30
Div Yield % 0.45
Rev 1y % (Qtr) -23.36
Total Debt (Qtr) 1.23 Bn
Debt/Equity (Qtr) 0.51
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About

Star Bulk Carriers Corp., often recognized by its stock symbol SBLK, is a prominent player in the global shipping industry. The company's primary business involves the transportation of a diverse range of bulk commodities, including iron ore, minerals, and grain, across international shipping routes. Established in the Marshall Islands in 2006, Star Bulk Carriers Corp. has its headquarters in Athens, Greece. Star Bulk Carriers Corp.'s operations are centered around a fleet of 112 vessels, which collectively have an aggregate capacity of 12.5 million...

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Investment thesis

Bull case

  • Operating cash flow of 271.14M provides strong 14.47x coverage of stock compensation 18.74M, indicating sustainable incentive practices.
  • Strong tangible asset base of 3.79B provides 3.08x coverage of total debt 1.23B, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 271.14M provides 2.86x coverage of SG&A expenses 94.92M, showing efficient operational cost management.
  • Tangible assets of 3.79B provide exceptional 193.28x coverage of deferred revenue 19.61M, showing strong service capability backing.
  • Operating cash flow of 271.14M provides strong 13.83x coverage of deferred revenue 19.61M, indicating service delivery capability.

Bear case

  • Operating cash flow of 271.14M provides thin coverage of dividend payments of (92.64M) with a -2.93 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 429.15M provides weak coverage of capital expenditures of (158.01M), with a -2.72 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 138.60M show weak coverage of depreciation charges of 198.92M, with a 0.70 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 429.15M represents just -1.52x of debt issuance (281.89M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 198.92M relative to operating cash flow of 271.14M, which is 0.73x suggests significant maintenance capital requirements affecting free cash flow.

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 1.01 0.60
EV to Cash from Ops. EV/CFO 22.43 6.07
EV to Debt EV to Debt 3.11 60.45
EV to EBIT EV/EBIT 48.20 4.74
EV to EBITDA EV/EBITDA 16.91 5.76
EV to Free Cash Flow [EV/FCF] EV/FCF 38.84 5.00
EV to Market Cap EV to Market Cap 1.61 29.59
EV to Revenue EV/Rev 5.52 2.00
Price to Book Value [P/B] P/B 1.53 1.07
Price to Earnings [P/E] P/E 245.30 13.80
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.66 2.47
Dividend Payout Ratio % Div Payout % (Qtr) 168.10 68.67
Dividend per Basic Share Div per Share (Qtr) 0.79 1.18
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 20.89 105.16
Interest Coverage Int. cover (Qtr) 1.80 -7.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -37.62 -33.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -3.29 25.96
Dividend Growth (1y) % Div 1y % (Qtr) -62.74 9.12
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -64.82 -27.24
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -41.35 -36.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -64.81 -26.39
EBT Growth (1y) % EBT 1y % (Qtr) -79.63 -36.07
EPS Growth (1y) % EPS 1y % (Qtr) -84.28 -30.68
FCF Growth (1y) % FCF 1y % (Qtr) -41.75 14.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -37.28 -7.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.28 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.82 0.08
Cash Ratio Cash Ratio (Qtr) 1.22 1.33
Current Ratio Curr Ratio (Qtr) 1.73 2.15
Debt to Equity Ratio Debt/Equity (Qtr) 0.51 0.73
Interest Cover Ratio Int Coverage (Qtr) 1.80 -7.10
Times Interest Earned Times Interest Earned (Qtr) 1.80 -7.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 32.10 27.36
EBIT Margin % EBIT Margin % (Qtr) 13.19 17.95
EBT Margin % EBT Margin % (Qtr) 5.85 10.77
Gross Margin % Gross Margin % (Qtr) 36.20 37.00
Net Profit Margin % Net Margin % (Qtr) 5.80 9.28