Shares of drybulk ship owner Diana Shipping Inc. rose in premarket trading Thursday after the company posted stronger-than-expected first-quarter results and boosted its dividend.
The Greek company's profit and revenue more than doubled, surpassing analyst estimates as the company expanded its fleet, and rates increased. Diana also raised its dividend to 85 cents, from 60 cents in the fourth quarter.
Lazard Capital Markets analyst Urs Dur said he thinks the company will keep its dividend at 85 cents per share through 2009. He said demand for drybulk shipping will grow faster than supplies over the next year. He expects that to change in late 2009, but said Diana's contracts and its low debt may help the company post larger dividends.
Dur lifted his price target to $49 per share from $46 and kept a "Buy" rating on the stock.
Wachovia analyst Justin Yagerman said the company will need to make an acquisition to sustain cash flow growth.
The stock rose $1.01, or 2.9 percent, to $35.94 in premarket electronic trading. The stock closed at $34.93 Wednesday.
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