In this article, we will take a look at the 10 best shipping stocks that pay dividends.
The COVID-19 pandemic has had a significant impact on a variety of businesses including the global shipping industry. The shipping industry has been directly impacted by the coronavirus crisis because of reduced shipments amid a slump in production, supply and demand. Moreover, according to the International Energy Agency (IEA), during the peak of the epidemic in April 2020, demand for oil and gas dropped to an unsettling 30 million BPD, lowering the need for tankers. However, the relaxation of coronavirus limitations and the subsequent increase in economic activity, particularly in the United States, has boosted transportation stocks, notably shipping companies.
The global shipping sector was interrupted in March when the massive container ship Ever Given, which was carrying 18,300 containers at the time, blocked the Suez Canal. The Suez Canal blockage affected not only the global shipping industry and the Egyptian economy, but also a wide range of businesses, from domestic transportation providers to retailers, supermarkets, and manufacturers. According to German insurer Allianz, the blockage could cost global trade $6 billion to $10 billion per week. Shipowners who loan vessels to liners like Costamare Inc. (NYSE: CMRE) and Danaos Corporation (NYSE: DAC) benefited greatly from the Ever Given incident.
Why Invest in Dividend-Paying Shipping Stocks?
Shipping stocks are surging as investors look forward to a worldwide economic recovery in the second half of this year and 2022. The worldwide maritime transportation industry is steadily improving. The bulk shipping market expanded at a CAGR of 1.3% between 2015 and 2020, according to McKinsey data, and growth rates are likely to stabilize around 0.8% each year until 2030. The data also mentioned that in the next ten years, shipbuilding is projected to add 3 to 4% to active capacity per year, while decommissioning will remove 1 to 2%. As a result, supply will grow at a CAGR of 1 to 3%.
In late April, Jefferies Shipping Index was up 44.6%. In contrast, the S&P 500 is up 11% year-to-date, while the Russell 2000 was up 15%. The current situation of the shipping business, according to Jefferies analysts, has helped maintain values low and appealing for entry possibilities. The New York-based investment banking group also mentioned that prices for tanker firms are inclined to remain low in the first half of 2021, but that rates would improve dramatically in the second half as global demand, crude oil output, and refinery utilization rise.
One of the best shipping stocks that pay dividends is Greek container ship owner and operator Danaos Corporation (NYSE: DAC). The company pays an annualized dividend of $2 per share to shareholders with a dividend yield of 3.17%. The stock’s 52-week range is $3.33 – $67.40. Danaos Corporation (NYSE: DAC) has been a standout as evident from the stock’s significant surge of more than 1,481% over the past twelve months. The company has a market cap of $1.3 billion. The company’s total contracted revenues in the first quarter were $1.2 billion.
Another shipping stock that pays a dividend is Monaco-based container shipping firm Costamare Inc. (NYSE: CMRE). The company pays an annualized dividend of $0.4 per share with a fair yield of 3.73%. Costamare Inc. (NYSE: CMRE) owns 77 containerships. The company has a market cap of $1.3 billion. Shares of CMRE surged 133% over the past twelve months. Investors looking to add value to their dividend portfolio should consider adding Costamare Inc. stock. Operating activity net cash flows grew by $23.9 million to $274.3 million in 2020, up from $250.4 million in 2019. The growth is primarily due to an improved working capital position and increased charter revenue.
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International Seaways, Inc. (NYSE: INSW)
Although the tanker shipping sector had faced significant challenges led by COVID-19, shares of American crude tanker International Seaways, Inc. (NYSE: INSW) increased 13.4% in the last month. The company has a market cap of $563 million. The company pays an annualized dividend of $0.24 per share, with a 1.20% yield. At the end of the fourth quarter of 2020, International Seaways, Inc. (NYSE: INSW) had roughly $215 million in cash and $255 million in liquidity. On March 29, HC Wainwright & Co. initiated coverage of International Seaways, Inc. with a Buy rating and a price target of $30.
Just like the shipping industry, the hedge fund industry is also seeing the winds of change. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th, 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best shipping stocks that pay dividends.
Best Shipping Stocks that Pay Dividends
10. Nordic American Tankers Limited (NYSE: NAT)
Dividend Yield: 7.4%
Number of Hedge Fund Holders: 10
Nordic American Tankers Limited (NYSE: NAT) is a Bermuda-based international tanker company that operates Suezmax crude oil tankers. It is ranked tenth on our list of 10 best shipping stocks that pay dividends. The shipping firm now operates a fleet of 25 Suezmax crude tankers, each capable of carrying 1 million barrels of crude oil. Nordic American Tankers Limited declared a quarterly dividend of $0.02 per share on May 25 payable to shareholders in June.
Nordic American Tankers Limited (NYSE: NAT) has a market cap of $537 million. As of May 25, the company’s total assets are approximately $949 million. The stock has returned close to 18% to investors year to date. Nordic American Tankers is upgraded to In-Line by Evercore ISI Group in May 2021, with a $4 price target.
At the end of the first quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $7.11 million in Nordic American Tankers Limited (NYSE: NAT), up from 5 in the preceding quarter worth $7.6 million.
9. Danaos Corporation (NYSE: DAC)
Dividend Yield: 3.17%
Number of Hedge Fund Holders: 12
Danaos Corporation (NYSE: DAC) is a Greek containership operator that was founded in 1972. It is ranked ninth on our list of 10 best shipping stocks that pay dividends. Danaos Corporation operates a fleet of 65 containerships with a total capacity of 403,793 twenty-foot equivalent units, providing seaborne transportation services to liner firms in the United States, Europe, Asia, and Australia. The company recently resumed dividend payments to shareholders, declaring a quarterly dividend of $0.5 per share payable in June on May 5. DAC has a PE ratio of 3.22.
Danaos Corporation (NYSE: DAC) has a market cap of $1.3 billion. The company’s total contracted revenues in the first quarter were $1.2 billion. Danaos stock has returned a whopping 1,481% to investors over the past twelve months. For the first quarter of 2021, the company posted an adjusted net income of $58.0 million, or $2.83 per share, an increase of 74.2% from $33.3 million, or $1.34 per share, for the same period in 2020.
At the end of the first quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $122 million in Danaos Corporation (NYSE: DAC), up from 11 in the preceding quarter worth $71.2 million.
8. Costamare Inc. (NYSE: CMRE)
Dividend Yield: 3.73%
Number of Hedge Fund Holders: 12
Costamare Inc. (NYSE: CMRE) is a Monaco-based container shipping company that was founded in 1974. It is placed eighth on our list of 10 best shipping stocks that pay dividends. As of February 2021, Costamare Inc. owned 77 containerships with a total capacity of about 555,810 twenty-foot equivalent units. The company pays an annualized dividend of $0.4 per share with a fair yield of 3.73%.
Costamare Inc. (NYSE: CMRE) has a market cap of $1.3 billion. Shares of CMRE surged 133% over the past twelve months. Adjusted net income payable to common stockholders for the full year 2020 was $123.7 million, or $1.02 adjusted earnings per share.
At the end of the first quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $43 million in Costamare Inc. (NYSE: CMRE), up from 11 in the preceding quarter worth $46 million.
7. Star Bulk Carriers Corp. (NASDAQ: SBLK)
Dividend Yield: 6.15%
Number of Hedge Fund Holders: 13
Star Bulk Carriers Corp. (NASDAQ: SBLK) is a Greek shipping company that was founded in 2006. It is ranked seventh on our list of 10 best shipping stocks that pay dividends. The shipping firm had a fleet of 128 vessels with a total capacity of around 14.1 million deadweight tons as of March 2021, which transport a variety of big bulks such as iron ores, coal, and grains. Star Bulk Carriers Corp. also transports minor bulks such as steel and fertilizer products. The company currently pays an annualized dividend of $1.20 per share with a high yield of 6.15%.
Star Bulk Carriers Corp. (NASDAQ: SBLK) has a market cap of $1.98 billion. The company earned $35.8 million in net income in the first quarter of 2021, or $0.36 per share. Net cash generated by operating activities increased by 147 percent to $79.2 million in the first quarter of 2021, compared to $32.1 million in the first quarter of 2020. Jefferies maintained a Buy rating on Star Bulk Carriers and increased the price target to $25 on May 20. Shares of SBLK jumped 283% over the past twelve months.
At the end of the first quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $692 in Star Bulk Carriers Corp. (NASDAQ: SBLK), up from 10 in the preceding quarter worth $382 million.
6. International Seaways, Inc. (NYSE: INSW)
Dividend Yield: 1.20%
Number of Hedge Fund Holders: 14
International Seaways, Inc. (NYSE: INSW) is a New York-based oil and petroleum products shipping company that was founded in 1999 as OSG International, Inc. It is ranked sixth on our list of 10 best shipping stocks that pay dividends. The shipping firm operates a fleet of 36 vessels that transport oil and crude products internationally for independent and state-owned oil firms, refinery operators, and the government. The company pays an annualized dividend of $0.24 per share, yielding at 1.20%.
The company has a market cap of $563 million. The company has about $215 million in cash and $255 million in liquidity at the end of the fourth quarter of 2020. International Seaways, Inc. (NYSE: INSW) announced in March that it would merge with Connecticut-based tanker firm Diamond S Shipping Inc. (NYSE: DSSI) in the third quarter of 2021, creating the second-largest US-listed tanker company by vessel count of about 100 and shipping revenues of over $1 billion. INSW will continue to trade on the NYSE under the symbol “INSW” following the merger. On March 29, HC Wainwright & Co. initiated coverage of International Seaways, Inc. with a Buy rating and a price target of $30. International Seaways, Inc. stock has returned 23% to investors year to date.
At the end of the first quarter of 2021, 14 hedge funds in the database of Insider Monkey held stakes worth $99.5 in International Seaways, Inc. (NYSE: INSW), up from 8 in the preceding quarter worth $80 million.
Like Nordic American Tankers Limited (NYSE: NAT), Costamare Inc. (NYSE: CMRE), Danaos Corporation (NYSE: DAC) and Star Bulk Carriers Corp. (NASDAQ: SBLK), INSW is one of the best shipping stocks that pay dividends.
5. SFL Corporation Ltd. (NYSE: SFL)
Dividend Yield: 6.94%
Number of Hedge Fund Holders: 14
SFL Corporation Ltd. (NYSE: SFL) is a Bermuda-based vessel operator that was founded in 2003 and was formerly known as Ship Finance International Limited. It is ranked fifth on our list of 10 best shipping stocks that pay dividends. The chartering company has a fleet of more than 80 bulkers, tankers, container ships, and offshore assets. Aside from oil and chemical transportation, the company also operates in car and drilling rigs transportation as well as dry bulk shipments. On May 12, the company paid its shareholders its 69th consecutive quarterly dividend of $0.15 per share.
The company has a market cap of $1.1 billion. The company’s total operating revenues in the first quarter of 2021 were $109 million, down from $115 million in the previous quarter. SFL Corporation Ltd. earned $31.5 million in net income for the first quarter or $0.27 in earnings per share. Year to date, the stock has returned 38% to investors.
Out of the hedge funds being tracked by Insider Monkey, Los Angeles-based investment firm Oaktree Capital Management is a leading shareholder in SFL Corporation Ltd. (NYSE: SFL) with over 12 million shares worth more than $12.9 million.
4. Matson, Inc. (NYSE: MATX)
Dividend Yield: 1.42%
Number of Hedge Fund Holders: 19
Matson, Inc. (NYSE: MATX) is a Hawaii-based container shipping company founded in 1882 and was formerly known as Alexander & Baldwin Holdings, Inc. It is ranked fourth on our list of 10 best shipping stocks that pay dividends. The company offers freight transportation of perishable commodities, cattle, packaged food and beverages, garments, building materials, and vehicles to retailers, manufacturers, and freight forwarders in Hawaii, Alaska, and Guam, and Micronesia Islands. In addition, the company provides logistic services such as multimodal transportation brokerage services. On April 22, the company declared a cash dividend of $0.23 per share payable on June 2021 to all shareholders. MATX has a PE ratio of 10.2.
The company has a market cap of $2.8 billion. The company’s revenue in the first quarter of 2021 came in at $711.8 million, up from $513.9 million in the first quarter of 2020. For the quarter ended March 31, 2020, the company earned $3.8 million in net income or $0.09 per diluted share. Shares of MATX climbed 126% over the past twelve months.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $32 million in Matson, Inc. (NYSE: MATX), up from 14 in the preceding quarter worth $13.5 million.
3. Scorpio Tankers Inc. (NYSE: STNG)
Dividend Yield: 1.79%
Number of Hedge Fund Holders: 20
Scorpio Tankers Inc. (NYSE: STNG) is a Monaco-based crude oil shipping company that was founded in 2009. It is ranked third on our list of 10 best shipping stocks that pay dividends. The shipping firm now operates a fleet of 131 product tankers that service blue-chip oil companies such as Chevron Corporation (NYSE: CVX), BP p.l.c. (NYSE: BP), Royal Dutch Shell plc (NYSE: RDS-A). Scorpio Tankers stock has returned 26% to investors over the past twelve months. Scorpio Tankers Inc. declared a quarterly dividend of $0.10 per share on May 6 payable to shareholders in June.
The company has a market cap of $1.3 billion. The company’s revenue in the first quarter of 2021 came in at $134 million. Scorpio Tankers Inc. earned $46.6 million in net income for the three months ended March 31, 2020, or $0.85 basic and $0.82 diluted earnings per share. The company had $280.1 million in unrestricted cash and cash equivalents as of May 6, 2021. Scorpio Tankers Inc (NYSE: STNG) was given a Buy rating by HC Wainwright & Co. on March 29 with a target price of $28 per share. Shares of STNG jumped 52% in the last three months. The current stock performance of Scorpio Tankers Inc. shows a 52-week-range of $8.28 – $23.37.
At the end of the first quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $88 million in Scorpio Tankers Inc. (NYSE: STNG), up from 18 in the preceding quarter worth $44 million.
2. Genco Shipping & Trading Limited (NYSE: GNK)
Dividend Yield: 1.28%
Number of Hedge Fund Holders: 22
Genco Shipping & Trading Limited (NYSE: GNK) is a New York-based provider of global seaborne dry bulk transportation services that was founded in 2004. It is ranked second on our list of 10 best shipping stocks that pay dividends. As of February 2021, the company owned a fleet of 41 vessels that transports dry-bulk cargoes including iron ore, steel products, coal, and grains. For the first quarter of 2021, Genco Shipping & Trading Limited upped its quarterly cash dividend to $0.05 per share, up from $0.02 per share in March.
The company has a market cap of $662 million. For the first quarter of 2021, the company earned $2.0 million in net income or $0.05 in basic and diluted earnings per share. As of March 31, 2021, the brand has a great financial position with $164.0 million in cash, including $40.8 million in restricted cash. Shares of GNK increased 235% over the past twelve months. On May 6, Jefferies recommended Genco Shipping & Trading as a Buy and raised the price target to $20.
At the end of the first quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $121 million in Genco Shipping & Trading Limited (NYSE: GNK), up from 15 in the preceding quarter worth $142 million.
1. DHT Holdings, Inc. (NYSE: DHT)
Dividend Yield: 2.50%
Number of Hedge Fund Holders: 22
Topping the list of the best shipping stocks that pay dividends is DHT Holdings, Inc. (NYSE: DHT). The Bermuda-based crude oil tanker firm was founded in 2005. DHT Holdings, Inc. had a fleet of 28 very large crude carriers with a total capacity of 8,660,835 deadweight tons as of March 17, 2021, mostly transporting crude oil in Norway, Singapore, and Monaco. The company paid its 45th consecutive quarterly dividend of $0.04 per share to shareholders on May 26. The company has a dividend yield of 2.50% and a PE ratio of 5.2.
The company has a market cap of $1.1 billion. In the first quarter of 2021, the firm earned $11.6 million in net income or $0.07 per basic share. The company invested $136 million on two VLCCs built by DSME (Daewoo) and delivered in February and April 2021. DHT Holdings, Inc. has entered into three separate agreements to sell its three 2004-built VLCCs, DHT Lake, DHT Raven, and DHT Condor, for a total of $88.75 million at the end of the first quarter. On May 25, Evercore ISI Group upgraded DHT Holdings to Outperform. DHT stock has returned 22% to investors year to date.
At the end of the first quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $106 million in DHT Holdings, Inc. (NYSE: DHT), up from 18 in the preceding quarter worth $88 million.
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Disclosure: None. 10 Best Shipping Stocks that Pay Dividends is originally published on Insider Monkey.
