Some shipping CEOs are saying the supply chain crisis is finally easing, and investors are taking notice: As of April 12, the benchmark Dow Jones U.S. Marine Transportation Index rose 7% in the past year while the Russell 1000 Index dropped 9%.
The improving outlook for global trade this month propelled shares of companies including ZIM Integrated Shipping, Kirby Corp., and Ardmore Shipping. Here are the top three shipping stocks with the best value, the fastest growth, and the most momentum, respectively.
Best Value Shipping Stocks
These are the shipping stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Shipping Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|ZIM Integrated Shipping Services Ltd. (ZIM)||17.63||2.1||0.5|
|A.P. Møller Mærsk A/S (AMKBY)||8.42||29.4||1.1|
|Navios Maritime Partners L.P. (NMM)||23.31||0.7||1.2|
- ZIM Integrated Shipping Services Ltd.: ZIM is an Israeli container transportation and logistics company providing cargo for about 100 countries. In November, ZIM said it had opened an agency in New Zealand to expand its operations in the region. In February, ZIM introduced the ZIM Colibri Xpress, a premium line that ships cargo from South America to the east coast of the U.S.
- A.P. Møller Mærsk A/S.: Mærsk is a Danish shipping, transport, and logistics company. It provides container and special vessels, terminals, supply chips, and container box manufacturing services to clients around the world. The company in December said Vincent Clerc would become CEO effective Jan. 1, 2023, replacing Søren Skou. Clerc was most recently CEO of the company's Ocean & Logistics business. It's the world's largest shipping company by revenue. Like ZIM, Maersk's profit fell in the final quarter of 2022 on weakening demand and lower freight rates.
- Navios Maritime Partners L.P.: Navios is a Greek maritime freight transportation company. It owns and operates a fleet of dry bulk and container vessels.
Fastest-Growing Shipping Stocks
These are the top shipping stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 1,000% were excluded as outliers.
|Fastest Growing Shipping Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Kirby Corp. (KEX)||68.94||4.1||244||23|
|Nordic American Tankers Ltd. (NAT)||3.49||0.7||N/A (see company description)||387|
|Star Bulk Carriers Corp. (SBLK)||21.22||2.2||133||47|
- Kirby Corp.: Kirby is a marine transportation company that ships liquid products and industrial equipment through intracoastal waterways.
- Nordic American Tankers Ltd.: Nordic American is a tanker company located in Bermuda. It owns and operates a fleet of 24 crude oil tankers. On Feb. 27, the company reported earnings total revenue surged by three-fold on a net income of $36 million. Nordic Americans also paid out a dividend of $0.15, the 102 consecutive quarter with dividend distribution. Note Nordic American doesn't have an EPS growth figure in the table above because the company reported negative EPS in Q4 2021.
- Star Bulk Carriers Corp.: Star Bulk is a Greek transportation company that ships minerals, grain, fertilizer, and steel products.
Shipping Stocks With the Most Momentum
These are the shipping stocks that had the highest total return over the last 12 months.
|Shipping Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Ardmore Shipping Corp. (ASC)||14.45||0.6||169|
|Eneti Inc. (NETI)||8.93||0.3||41|
|Nordic American Tankers Ltd. (NAT)||3.49||0.7||32|
|Russell 1000 Index||N/A||N/A||-9|
|Dow Jones U.S. Marine Transportation Index||N/A||N/A||7|
- Ardmore Shipping Corp.: Ardmore transports petroleum and chemical products worldwide. The company owns and operates over 20 vessels.
- Eneti Inc.: Eneti has five wind turbine installation vessels to construct offshore wind turbine generators. The company changed its name and business model in 2021 from Scorpio Bulkers Inc., a dry bulk marine shipping company. Eneti reported its fourth-quarter earnings on Feb. 9, with a net income of $12 million on revenue that more than doubled compared to Q4 2021. The company's wholly-owned subsidiary, Seajacks UK Ltd., was awarded a European contract for assistance in producing an NG2500 vessel worth approximately $4 million in revenue.
- Nordic American Tankers Ltd.: See company description.
Trends in the Shipping Industry
The shipping industry was hurt by the supply chain crisis during the worst periods of the pandemic and its aftermath. Numerous factors contributed to the crisis, including the war between Russia and Ukraine and COVID-19 lockdowns in China.
Those developments led shipping companies to run into delays in docking vessels and have forced companies to cancel shipments across major trade lanes. In particular, shipping capacity along the route between Asia and the west coast of the U.S. was 25% below historic levels earlier this year. A broader slowdown in the economy could pose further challenges to the industry if consumer and industrial demand for a variety of products declines.
Advantages of Shipping Stocks
The shipping industry is crucial for the transport of food, fuel, raw materials, and manufactured goods around the world, and moves roughly 11 billion tons of goods per year. Because of the vital role that shipping companies play, they are likely to remain critically important. Additionally, the shipping industry has the lowest environmental impact within the transport segment when measured on a per-ton basis, making it a likely area of interest as investors weigh climate impact.
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ZIM Integrated Shipping Services Ltd. "ZIM Establishes a Fully-Owned Agency in New Zealand."
ZIM Integrated Shipping Services Ltd. "ZIM is Introducing ZIM Colibri Xpress (ZCX) - A New Premium Line From South America West Coast to US East Coast."
A.P. Møller Mærsk A/S. "A.P. Møller Mærsk A/S-Change of CEO."
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Nordic American Tankers Ltd. "Reports Fourth-Quarter Full-Year Results."
Nordic American Tankers Ltd. "Dividend Paid 102 Consecutive Quarters."
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Eneti Inc. "Eneti Inc. Announces A Contract Awards for Seajacks."
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