Safe Bulkers (SB) AI Stock Analysis

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Safe Bulkers

(NYSE:SB)

71Outperform

Safe Bulkers' stock score reflects a balance of strengths and challenges. Strong financial performance metrics and solid valuation suggest potential upside, though negative free cash flow and bearish technical indicators temper expectations. The earnings call highlights a mixed outlook with a focus on capital structure and fleet renewal against a backdrop of softer market conditions.

Safe Bulkers (SB) vs. S&P 500 (SPY)

Market Cap

$347.39M

Dividend Yield6.06%

Average Volume (3M)622.55K

Price to Earnings (P/E)4.0

Beta (1Y)0.93

Revenue Growth8.17%

EPS Growth35.92%

CountryUS

Employees941

SectorIndustrials

Sector Strength66

IndustryMarine Shipping

Share Statistics

EPS (TTM)0.83

Shares Outstanding105,269,714

10 Day Avg. Volume706,870

30 Day Avg. Volume622,550

Financial Highlights & Ratios

PEG Ratio0.11

Price to Book (P/B)N/A

Price to Sales (P/S)1.38

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.10

Price Target Upside58.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Safe Bulkers Business Overview & Revenue Model

Company DescriptionSafe Bulkers, Inc. is a marine transportation company that specializes in the ownership and operation of dry bulk vessels. The company is primarily engaged in the seaborne transportation of bulk commodities such as coal, grain, and iron ore. Safe Bulkers operates a modern fleet of vessels that are capable of transporting large quantities of cargo across international waters, serving customers worldwide. The company is headquartered in Monaco and is listed on the New York Stock Exchange under the ticker symbol SB.

How the Company Makes MoneySafe Bulkers makes money primarily through the chartering of its dry bulk vessels to customers who need to transport bulk commodities. The company enters into time charter agreements where vessels are leased out for a specific period at a predetermined daily rate. Revenue is generated based on the number of days the vessel is chartered and the agreed-upon rate. Additionally, Safe Bulkers may also engage in spot chartering, where vessels are hired for single voyages at market rates. The company's earnings are influenced by factors such as global demand for bulk commodities, shipping market conditions, and the availability of vessels. Key partnerships with major commodity producers and traders can also contribute to its revenue streams.

Safe Bulkers Financial Statement Overview

Summary

Safe Bulkers shows strong revenue growth and profitability with a solid equity base. However, challenges include a decline in revenue growth from 2022 to 2023 and negative free cash flow, which could impact financial flexibility.

Income Statement

Positive

The company has shown consistent revenue growth from 2019 to 2024, reaching $307.63 million in 2024. Gross profit margin improved significantly from 2020, reaching 45.57% in 2024. Net profit margin has also improved, marking 31.65% in 2024, indicating strong profitability. However, there's a decline in revenue from 2022 to 2023, which could be a concern.

Balance Sheet

Positive

Safe Bulkers maintains a moderate debt-to-equity ratio of 0.65 in 2024, reflecting manageable leverage. The equity ratio has improved, reaching 59.27% in 2024, indicating a strong equity base. However, the increase in total debt from 2020 to 2024 could pose potential risks if leverage increases further.

Cash Flow

Positive

The company's operating cash flow has remained strong, but free cash flow has been negative in recent years, notably -$14.32 million in 2024. The operating cash flow to net income ratio suggests strong cash generation relative to profits, but negative free cash flow could limit financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
307.63M	284.40M	349.72M	329.03M	198.16M
	Gross Profit
140.17M	119.41M	210.02M	194.87M	32.22M
	EBIT
128.43M	104.15M	132.55M	116.38M	-45.55M
	EBITDA
186.89M	156.19M	234.17M	232.20M	64.75M
	Net Income Common Stockholders
97.38M	77.35M	172.55M	174.35M	20.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
125.42M	87.92M	114.38M	102.08M	105.22M
	Total Assets
1.40B	1.34B	1.25B	1.09B	1.11B
	Total Debt
536.64M	507.92M	414.36M	377.65M	607.67M
	Net Debt
455.56M	458.98M	365.18M	276.65M	517.63M
	Total Liabilities
571.48M	547.30M	474.00M	415.08M	660.88M
	Stockholders Equity
831.62M	792.51M	771.92M	679.24M	427.55M
Cash Flow		Free Cash Flow
-14.32M	-86.90M	34.72M	107.97M	12.93M
	Operating Cash Flow
130.46M	122.21M	218.00M	217.20M	63.38M
	Investing Cash Flow
-71.73M	-151.73M	-229.40M	8.60M	-34.78M
	Financing Cash Flow
-25.86M	29.14M	-40.10M	-225.90M	-9.29M

Safe Bulkers Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.22

Price Trends

50DMA

3.62

Negative

100DMA

3.60

Negative

200DMA

4.16

Negative

Market Momentum

MACD

-0.11

Positive

RSI

38.31

Neutral

STOCH

48.91

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SB, the sentiment is Negative. The current price of 3.22 is below the 20-day moving average (MA) of 3.48, below the 50-day MA of 3.62, and below the 200-day MA of 4.16, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 38.31 is Neutral, neither overbought nor oversold. The STOCH value of 48.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SB.

Safe Bulkers Risk Analysis

Safe Bulkers disclosed 72 risk factors in its most recent earnings report. Safe Bulkers reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Safe Bulkers Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SB	71 Outperform	$347.39M	3.97	11.99%	6.06%	8.17%	35.92%
NMM	70 Outperform	$960.70M	2.72	12.46%	0.61%	2.08%	-14.91%
SBLK	69 Neutral	$1.62B	4.92	14.71%	15.52%	33.31%	62.94%
GNK	68 Neutral	$541.29M	7.20	8.30%	11.59%	10.21%	―
SBRA	63 Neutral	$4.32B	33.79	4.57%	6.62%	7.22%	809.92%
Sector *	62 Neutral	$4.17B	11.26	5.46%	215.76%	4.12%	-8.54%
DSX	54 Neutral	$172.49M	25.34	2.56%	11.41%	-12.93%	-86.34%

* Industrials Sector Average

Performance Comparison

Safe Bulkers

3.22

-1.43

-30.75%

DSX

Diana Shipping

1.42

-1.27

-47.21%

GNK

Genco Shipping

12.27

-6.88

-35.93%

NMM

Navios Maritime Partners

32.03

-10.12

-24.01%

SBRA

Sabra Healthcare REIT

17.79

5.11

40.30%

SBLK

Star Bulk Carriers

13.59

-7.53

-35.65%

Safe Bulkers Earnings Call Summary

Earnings Call Date: Feb 18, 2025 | % Change Since: -11.54% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook with strengths in capital structure and fleet renewal efforts, but challenges due to a weaker charter market and decreasing financial performance. The company's commitment to sustainability and cash flow visibility provides a positive angle, though market conditions remain a concern.

Highlights

Strong Capital Structure and Liquidity

Safe Bulkers maintains a strong capital structure with a leverage of 35% and ample liquidity of $276 million, providing flexibility for capital allocation and fleet expansion.

Significant Contracted Revenue

The company has a contracted revenue of $205 million, providing considerable cash flow visibility, especially with Capes that have a period time charters averaging $22,000 daily.

Fleet Renewal and Environmental Upgrades

Safe Bulkers has invested in environmentally upgraded vessels and new builds, with a current fleet average age of 10 years and 24 vessels having undergone environmental upgrades.

Lowlights

Weaker Charter Market Environment

The charter market weakened during Q4 2024, impacting revenues and profitability, resulting in decreased revenues due to lower charter hires and increased operating expenses.

Decreased Financial Performance

Adjusted EBITDA for Q4 2024 was $40.7 million, down from $50.7 million in Q4 2023. Adjusted earnings per share dropped to $0.15 from $0.25 in the same period.

Asset Prices and Market Conditions

Asset prices weakened during the second half of 2024, and secondary prices may fall further in line with freight markets. The company anticipates a softer trade market as supply grows faster than demand.

Company Guidance

During the Safe Bulkers conference call for the fourth quarter of 2024, the company provided detailed guidance on several financial and operational metrics. The company announced a $0.05 per share dividend, maintaining a strong capital structure with a leverage of about 35% and liquidity of $276 million. They have a contracted revenue of $205 million, bolstered by $145 million from period-chartered Capes with an average daily rate of $22,000. The company reported a net income of $19.4 million for the fourth quarter and an adjusted EBITDA of $40.7 million. The company's fleet, with an average age of 10 years, includes 11 eco-ships and 11 Phase 3 vessels, with plans for seven more Phase 3 newbuilds. The company's debt stands at $545 million, with a weighted average interest rate of 6.12%. The management highlighted a focus on fleet renewal and upgrading, anticipating a softer trade market in the coming quarters but remaining committed to sustainable growth and shareholder wealth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.