General Maritime Delivers a Dividend

General Maritime (GMR Quote) told investors on Jan. 26 that it would begin paying a cash dividend. On its own, this isn't earth-shattering news, as it seems like at least one company each week has initiated a payout since Congress passed the new 15% maximum dividend tax rate in May 2003.

Even so, when the energy tanker operator said its expected yield would be 18%, or about 10 times what the average S&P 500 stock offers, the company had my full attention.

General Maritime is a leading energy transporter in the Atlantic Basin, with a fleet of 47 tankers. More than 80% of the company's ships operate in the spot market, in which volume and rates are dependent on current customer demand, rather than predetermined contractually.

On a quarterly basis, General Maritime plans to return to investors any earnings before taxes, depreciation and amortization that top $100 million; that amount will be reserved annually for maintenance and fleet renewal expenses. The company said it will declare its first dividend after reporting first-quarter results at the end of April. ...