Costamare (CMRE) After Its Dividend Declarations And The Valuation Debate

Costamare (CMRE) has put income front and center, declaring cash dividends on its Series B, C and D preferred shares alongside a quarterly common payout of US$0.125 per share.

Costamare’s share price has moved to US$15.44 after a 1-day share price return of 1.38% and a 7-day gain of 6.26%. The 1-year total shareholder return of 33.71% and 3-year total shareholder return of 148.46% indicate momentum that has been building over time rather than fading.

Scan beyond Costamare and compare its income profile with a hand-picked 7 dividend fortresses that pairs sizeable payouts with balance sheet strength.

After a 1-year gain of 33.71% and a 3-year total return that is many times higher, the real puzzle with Costamare now is whether most of the upside is already in the rear-view mirror. Or if the valuation still leaves meaningful room ahead.

Most Popular Narrative: 26.5% Undervalued

Analysts following Costamare see a fair value of $21 per share, set against a last close of $15.44. This frames the current debate around how much future earnings are really worth once shipping conditions cool.

The recent long-term charters for new containership orders and forward fixtures (with $310 million incremental contracted revenues and $2.5 billion total contracted revenues) may be leading the market to expect sustained high earnings and cash flow visibility, which could overstate future earnings if market conditions weaken.

See why 8 investors see Costamare as 26% undervalued.

Result: Fair Value of $21 (UNDERVALUED)

Still, Costamare’s story could change quickly if charter rates reset lower, or if counterparty issues chip away at that US$2.5b contracted pipeline.

Find out about the key risks to this Costamare narrative.

Another View On Costamare’s Valuation

The first perspective on Costamare relies on analyst targets that present the stock as about 26.5% undervalued at $21 per share. A different tool, the SWS DCF model, presents a more conservative picture, with an estimated future cash flow value of $13 compared with the current $15.44, which instead suggests an overvalued result.

These two models lead to very different conclusions, so the key question is which set of assumptions you are more comfortable relying on when cash flows and discount rates eventually meet reality.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Costamare for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 31 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed messages on Costamare’s valuation and income profile are exactly why you should move quickly, review the data yourself, and weigh both the potential upside and the issues that could hold it back by checking the 2 key rewards and 4 important warning signs.

Looking for more investment ideas beyond Costamare?

If Costamare has your attention today, do not stop there. Broaden your watchlist now and give yourself more options before the next move arrives.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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