Time To Get Back Into Shipping Stocks?

I've been a big fan of shipping stocks in the past because of their high dividend payouts. However, I sold off some shares during the downturn in the economy and have not added to any of my current positions in quite some time. My current holdings include Euroseas LTD (ESEA) and General Maritime Corp. (GMR), with dividend yields of 9.30% and 25.10% respectively. While current earnings do not support such high payouts, world trade appears to be picking up, so shipping should gain ground along with improvements in trade.

According to the statistics issued by the Bureau for Economic Policy, research showed the volume of world trade rising 3.5% in July after a revised increase of 1.6% in June. Decrease in the world trade was caused by the decrease in demand; but, the increasing trade ties among countries can play an important role in stabilizing the world economy. The rise in volumes was the steepest since December 2003.

With share prices of shipping companies being so cheap and trade volumes on the rise, is now the time to buy into shipping? I tend to think so. While some companies may be forced to lower dividend payments, their future prospects look quite good. Given the fact that their stock prices are at extreme lows, now might be the perfect time to make a long term investment.

With this in mind, I intend to either add to my current positions in ESEA and GMR or purchase shares in another company whose financials are a little better positioned. I'll have to do more research before I make a final decision.