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Ship Finance International Ltd. (SFL) has released its first quarter results and the big news for income investors is the restoration of the quarterly dividend rate to previous levels following a one quarter decrease. The shipping sector has been a train wreck - ship wreck? - since 2008 when an oversupply of new ships purchased by aggressive shipping companies sent charter rates to below breakeven for many companies. Ship Finance is one of the few companies to have made it out through the bad times with the current ability to pay a decent dividend and provide the potential for share appreciation returns to investors.

Ship Finance works as a leasing company in the shipping industry. It buys ships and leases them out on long-term bare boat contracts. The customer companies typically pay a minimum per day lease rate with a profit-sharing clause if the shipper is able to earn above a certain threshold. Ship Finance was spun out of Frontline Ltd (FRO) in 2004 and initially just owned crude oil tankers. Over the years, Ship Finance has expanded away from tankers and the Frontline leased vessels now account for one-third of the fleet. Offshore drilling and support ships are now the largest portion of the fleet accounting for 46% of the assets. Ship Finance also owns container and drybulk ships, accounting for 13% and 8%, respectively, of the fleet.

Historically, Ship Finance has paid out the majority of net income as dividends. In late 2008, the formerly steadily increasing quarterly payout was cut in half to 30 cents per share. The company resumed a path of increasing dividends in the first quarter of 2010 and the payout was up to 39 cents in the 2011 third quarter. Late in 2011, Frontline was in trouble with its loan covenants and was challenged to just stay profitable. Frontline made some moves to reduce its daily operating cost, including adjusting its lease terms, with Ship Finance. The result is a reduced debt load for Frontline and reduced daily lease rates on the tankers owned by Ship Finance. In return, Ship Finance received a $105 million up front payment and 100% profit share up the old lease rates. The new agreement runs through 2015.

Ship Finance reduced the dividend to 30 cents for the 2011 fourth quarter and now has re-raised the quarterly distribution to 39 cents for the 2012 first quarter dividend to be paid in June. The new dividend rate puts the yield at 9.8%, after the 6% share price increase following the announcement of the new dividend rate. A 10% yield is a reasonable return from Ship Finance based on the current soft tanker rates market. With some firming of tanker rates and better forward visibility on Frontline's earnings, Ship Finance's yield should slide to around 8%, which would result in a 20% share price increase. Ship Finance's shares should be viewed as over-priced anytime the yield slips below 8%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

While issues in education may be a hot topic for presidential candidates Mitt Romney and Barack Obama this year, Chicago Public Schools are already taking great strides in improving education in local high schools.

In the recent release of a new plan designed to improve financial understanding of high school students, Chicago Public Schools will begin implementing new economy courses for graduating senior classes.

“Financial Literary Framework” in Chicago Public Schools

According to a recent news release from the Council for Economic Education, a new personal finance class may become a standard part of high school curriculum in the near future. Aimed toward students in their senior year, the course will be part of a new K-12 Financial Literary Framework program supported by Chicago Public Schools.

The new program is intended to help build economic skills and financial know-how for the business world and everyday life after high school. While the announcement is very recent, this personal finance plan has been in the works for four years. It has succeed thanks to the close level of cooperation between the Chicago Public School system and the Council for Economic Education.

The Council calls itself the forefront of organizations in the U.S. that support both economic and financial student education issues. They work to help children and teens—from kindergarten to senior year—gather the skills they need to be strong consumers and citizens in the national economy.

“We couldn’t be more excited to be part of this important endeavor by Chicago Public Schools,” reported Nan Morrison, the president and CEO of the Council for Economic Education. “By providing [high school seniors] with the financial education they need, we hope to change their futures.”

Personal finance courses to prepare students for the economy

As a result of their progress in the financial course program, Chicago Public Schools were acknowledged during May’s White House summit on the topic of financial literacy for young adults. It is part of the ongoing effort so support an economic education in U.S. schools, as well as foster the critical skills needed to work through the advanced modern business world.

Concerning the class itself, the senior level personal finance course will be completed over the course of one semester, using curriculum and instruction based on high standards given by the Council for Economic Education. It is said to be academically challenging for the 12th grade students, but relevant and applicable to actual skills they will need after graduation.

Other supporting partners of the Financial Literacy Framework program include the Illinois State Treasurer’s Office, the Economic Awareness Council, the Federal Reserve Bank of Chicago, and the Illinois Credit Union. While expensive, these contributions in tandem with a $1 million grant courtesy of Discover Financial Services will help begin an early form of the plan in Spring 2013.

The generous grant is intended to introduce the personal finance course to over 25 Chicago Public Schools in the local district. The grant will also provide program training for over 250 teachers in the following three years, and is set to be part of standard school curriculum by 2016.