Seaspan (SSW:N and SSW.PRC:N) is a Stock Worth Considering


I first heard about Seaspan (SSW:N) as an investment idea from an accounting professor who had done an analysis of it and quite liked it. One of its advantages is that while it trades in the US, it is considered to be a non-US company and therefore does not deduct withholding taxes from dividend payments when held in Canadian accounts.

The publicly traded Seaspan is a different company than the barges and shipyards that one sees operating in the Vancouver area. It is a ship leasing company that owns container ships and leases them on long-term, fixed rate contracts, though from what I understand at one point in time they were related and they may have some board members in common. It has common and preferred shares. The Common Shares have been laggards on the market for the past year or so and currently trades at $19.75 and has a 7.59% dividend yield (more information here). It reached a high of over $24 in the summer of 2014 and a low of just under $17 in January of 2015.

It fits in with the type of stock that I like: somewhat boring, steady, and dividend paying. It has also increased its dividend by just over 8% in the past year, and dividend increases are definitely something we like to see for long term stability in a portfolio.

I hadn’t realized until recently that it also has preferred shares and they are looking quite attractive. For those not in the know, preferred shares are a class of shares that ranks ahead of the common shares upon the winding up of a company. They usually don’t have any voting rights are their dividend usually must be paid out before dividends on the common shares.

SSW.PRC:N, the C Class preferred shares, now trades about $25.60 and with a  yield of about 9.25%. The stock was at just over $28 last summer and has been coming down in price, but for no reason that I can discern. More information here

This preferred share would add an interesting and enticing income element to my portfolio. At a time when bank accounts yield about 1%, that is quite hefty. Preferred shares are generally not very volatile and has traded within a $24-$27 range for the past year. This is definitely something worthy of further research and consideration.


Leave a Reply

Your email address will not be published. Required fields are marked *