Companies in the shipping sector ship goods worldwide, including cereals, clothing, electronics, and appliances. Despite the word "shipping," these businesses frequently move goods by truck, train, air, and land and offer logistics and storage. Hapag-Lloyd AG (HPGLY) and A.P. Moller-Maersk A/S (AMKBY) are two of the biggest shipping firms in the world. The COVID-19 pandemic following Russia's invasion of Ukraine has posed persistent problems for the maritime sector. However, shipment backlogs have started to decrease recently.
We think shipping stocks are a good investment time because the backlog and supply chain disruptions have to work out on the heels after the limited number of vessels are available.
The shipping sector has outpaced the overall market in the last year. The Russell 1000 Index has a 1-year trailing total return of -5.6% compared to the Dow Jones U.S. Marine Transportation Index's 2.3% benchmark.
Given tremendous growth and unique pricing structures, now is a great time to buy these stocks.
Best shipping stocks 2022
The top 4 high dividend shipping stocks are listed below in order of best value, quickest growth, and most momentum. These stocks have the lowest 12-month trailing P/E ratio. A low P/E ratio indicates you're paying less for each dollar of profit generated because earnings can be returned to shareholders through dividends and buybacks.
- ZIM Integrated Shipping Services Ltd. (NYSE; ZIM)
Market Capitalization: 6.3 $B
Price: 52.75$
12 Month Trailing P/E ratio: 1.1
Israel-based ZIM Integrated Shipping Services (ZIM) offer marine transportation and logistics services. The business runs a group of vessels and provides related services such as cargo handling, multi-modal, tariff management, etc. ZIM Integrated Shipping Services Ltd. (ZIM) has outperformed the S&P 500 by more than 80% over the past year and is in a longer-term uptrend. ZIM has good growth and profitability, which translates into a larger dividend yield to satisfy investors. The business announced a quarterly cash dividend of $2.85 per share on May 18. On June 8, the company paid a dividend to common stockholders as of May 31, 2022.
- Star Bulk Carriers Corp. (NASDAQ: SBLK)
Market Capitalization: 3.07$B
Price: 18.81$
12 Month Trailing P/E ratio: 2.15
The Greek shipping line Star Bulk (SBLK) runs the business in the United States
with 128 dry bulk boats. Grain, fertilizer, minerals, and steel goods are all transported globally by the company's fleet of large ships.
The most significant shipping businesses frequently set themselves apart from the competition through the caliber of their fleets, especially the age of their ships. Older ships often require more maintenance, whereas newer ships typically use less fuel. Star Bulk runs three different vessel types with an average age of fewer than ten years, one of the world's most cost-effective dry bulk operators.
Star Bulk carefully invested the surplus from the surge in demand to assist it in getting ready for the next downturn. The corporation expects to more than triple cash and liquidity while reducing net debt by 43% from 2019 to 2022.
The stock is considerably beating its competitors with ongoing A+ quarterly momentum. Comparing price performance over six months, nine months, and one year, SBLK outperforms its competitors by a factor of two and three.
- Genco Shipping and Trading Ltd. (GNK)
Market Capitalization: 1.0$B
Price: 22.60$
12 Month Trailing P/E ratio: 2.33
EPS Growth (%): 1,840
Genco Shipping & Trading is a corporation that provides full-service logistics and transportation for commodities like nickel ore, grain, steel, and cement. According to Genco's May 4 report, net income attributable to Genco Shipping & Trading increased by approximately 21 on year-over-sales solid growth.
Genco faces difficulty maintaining a healthy dividend while continuing to grow its fleet and manage debt. Still, Genco is one of the outstanding dividend stocks in the shipping industry, with a yield that is north of 10% as of this writing. Genco might be a desirable investment for investors confident about the turnaround while being a little more speculative.
- Grindrod Shipping Holdings Ltd. (GRIN)
Market Capitalization: 0.4$B
Price: 21.74$
12 Month Trailing P/E ratio: 170.3
Global Ship Lease owns cruisers with a base in the UK and charters out mid-sized and smaller cruisers to container liner firms. On May 9, it released its Q1 2022 earnings. Time charter revenues nearly doubled YOY, while net income increased by approximately 17 times. The airline claimed that adding several highly appealing charters over the previous year contributed to growth.
Since operators may employ their entirely owned assets before switching to leased ships when demand is weak, this business may be more cycle-exposed than a typical shipper. Global Ship Lease, however, may perform well in any economy, provided it can purchase ships at fair prices, and its dividend yield of more than 3% makes it a solid option for income-focused investors.
Are shipping stocks right for you?
Despite being unable to travel nearly as quickly as some people's weekend speedboats, marine shippers operate enormous vessels that are significantly less likely to capsize if they encounter a heavy wave. That may also be an effective method to view these stocks.
Shippers have a considerably more solid underlying company with a multi-decade track record and durability through the business cycle. However, investors are unlikely to discover the same sustained, multi-year, spectacular returns as they do with tech stocks. These stocks serve as the speedboat's ballast.
Shipping stocks can provide stability and income for individuals looking to diversify their portfolios, keeping them afloat when more high-flying economic sectors encounter economic turbulence.
Conclusion
The shipping sector plays a significant role in the overall health of our economy. These businesses anticipate positive growth in the months ahead as they recover from the pandemic. Hence, it is the best time to invest in these stocks as they are expected to grow over the following years.
