The shipping industry includes companies that transport cargo around the world, from grains to apparel to electronics to appliances. In spite of the term "shipping," these companies often transport commodities and merchandise by air, sea, and on land by truck or train. They also provide storage and other logistics. Some of the largest shipping companies in the world include A.P. Møller-Mærsk A/S (AMKBY) and Hapag-Lloyd AG (HPGLY).
In the past year, the shipping industry has outperformed the broader market. The benchmark Dow Jones Global Shipping Index has provided 1-year trailing total returns of 101.3% compared with 66.1% for the Russell 1000 as of March 12, 2021. Note that these figures reflect substantial recovery from the bottoming out of the bear market which took place in late March, 2020. All statistics below are as of March 15, 2021.
Here are the top 3 shipping stocks with the best value, the fastest operating income growth, and the most momentum, respectively.
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 ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|International Seaways Inc. ( INSW)||19.54||546.8||4.4|
|Nordic American Tankers Ltd. ( NAT)||3.52||532.2||5.7|
|Danaos Corp. ( DAC)||47.73||981.3||7.4|
- International Seaways Inc.: International Seaways owns and operates oceangoing shipping vessels. The company primarily transports crude oil and petroleum products, serving customers worldwide. For Q4 2020, International Seaways reported a net loss of $116.9 million versus net income of $15.9 million a year earlier. Total shipping revenue fell by more than half year-over-year (YOY) for the same period. The company attributed the declines primarily to lower TCE revenues and a loss on disposal of vessels and other property, including impairments. Time charter equivalent (TCE) is a shipping industry measure of the average daily revenue performance of a vessel.
- Nordic American Tankers Ltd.: Norwegian shipping company Nordic American Tankers owns and charters oil tankers for service worldwide.
- Danaos Corp.: Greece-based Danaos owns a fleet of container ships that it charters to other shipping and liner companies. The company reported a 27.7% YOY increase in net income and 8.6% YOY growth in operating revenue for Q4 2020, spurred by a resurgence of demand.
These are the shipping stocks with the highest YOY operating income, also called operating earnings, growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Operating income excludes non-operating income and expenses (such as investment gains or losses), one-time items, as well as interest and taxes. This helps investors get a clearer picture at the strength of the underlying business without the effect of unusual one-off events, such as large tax credits, asset sales, or lawsuit settlements. If you decided to invest in a company, it's still important to look at these one-off non-operating expenses and incomes, as they can still influence a company's overall financial health.
|Fastest Growing Shipping Stocks|
|Price ($)||Market Cap ($B)||Operating Income Growth (%)|
|Star Bulk Carriers Corp. ( SBLK)||15.92||1.6||407.8|
|Matson Inc. ( MATX)||76.99||3.3||376.8|
|Genco Shipping & Trading Ltd. ( GNK)||11.63||0.5||45.9|
- Star Bulk Carriers Corp.: Star Bulk Carriers, based in Greece, owns and operates dry bulk carrier vessels. The company transports iron ore, coal, and grain, as well as other materials.
- Matson Inc.: Matson is a transportation and logistics company offering services throughout North America. The company provides domestic and international rail intermodal service, long haul and regional highway service, as well as supply chain and third-party logistics. Net income soared by more than five-fold YOY and total operating revenue grew by 29.5% YOY for Q4 2020. This performance was driven by the company's Ocean Transportation and Logistics segments.
- Genco Shipping & Trading Ltd.: Genco Shipping & Trading is a bulk carrier company that ships coal, grain, steel, iron ore, and similar products worldwide. Genco Shipping's 45.9% operating income growth excludes $74.2 in non-cash impairment charge on some of its vessels.
These are the shipping stocks that had the highest total return over the last 12 months.
|Shipping Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Danaos Corp. (DAC)||47.73||1.0||1,080|
|Global Ship Lease Inc. ( GSL)||15.14||0.6||295.3|
|Matson Inc. (MATX)||76.99||3.3||198.2|
|Dow Jones Global Shipping Index||N/A||N/A||101.3|
- Danaos Corp.: See above for company description.
- Global Ship Lease Inc.: United Kingdom-based Global Ship Lease owns and operates a fleet of mid-sized and smaller containerships. The company also provides technical and commercial management, chartering, and leasing services to other container liner companies. On March 5, the company announced that its board of directors had declared a cash dividend of $0.546875 per depositary share, each representing a 1/100th interest in a share of its 8.75% Series B Cumulative Redeemable Perpetual Preferred Shares. The dividend will be paid on April 1, 2021.
- Matson Inc.: See above for company description.
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YCharts. "YCharts." Accessed Mar. 16, 2021.
International Seaways Inc. "International Seaways Reports Fourth Quarter and Full Year 2020 Results." Accessed Mar. 16, 2021.
Danaos Corp. "Danaos Corporation Reports Results for the Fourth Quarter and Year Ended December 31, 2020." Accessed Mar. 16, 2021.
Matson Inc. "Matson, Inc. Announces Fourth Quarter And Full Year 2020 Results." Accessed Mar. 16, 2021.
Global Ship Lease Inc. "Global Ship Lease Declares Quarterly Dividend on its 8.75% Series B Cumulative Redeemable Perpetual Preferred Shares." Accessed Mar. 16, 2021.