In this piece we will take a look at the nine shipping stocks that pay dividends.
Recent trends in the global economy are nothing short of a historic crisis. After taking a beating from the worst pandemic in modern history, populations all over the world were on their early path to recovery when disaster struck in the form of the Russian invasion of Ukraine. This created a massive imbalance in global economies and saw prices for oil and commodities shoot up to record levels.
At the same time, global supply chains are finally picking up momentum after witnessing extreme pain due to post pandemic demand destruction. At the heart of all supply chains is the logistics industry, which is bifurcated into two categories. Out of these, inland transport covers the trucking and railroad segments, while shipping categorizes firms that haul cargo through the ocean.
The shipping industry is at the heart of the global supply chain as was evidenced by the recent Suez Canal crisis. The canal, which is a hub for ocean freight carriers, was blocked for a little less than a week in 2021. This then resulted in price increases for several products all over the globe.
Further boosting the importance of the shipping industry are several market research studies, all of which paint an optimistic future for the sector. For instance, a report by Valuates Report estimated that the industry was worth $61 billion in 2021, and that it should grow at a compounded annual growth rate (CAGR) of 5.1% until 2028. Trade agreements and capacity optimization are thought to be key drivers of the industry’s growth.
Another report by Fortune Business Insights analyzes the industry through the tonnage that it ships. The firm estimates that the industry’s shipping tonnage stood at 11 billion tons in 2021 and that it can grow at a CAGR of 2.5% over the next couple of years to stand at 13 billion tons in 2028. The research firm also believes that capacity optimization in the shipping industry, through large players partnering up with startups to use the latest technologies for optimizing trade routes and positioning data, can eliminate several pain points for the industry, such as the age old problem of shipping empty containers after a journey is completed.
The most optimistic research report part of the analysis today comes from Market Research Future. It estimates that the cargo shipping market was valued at $13 billion in 2021, and it will grow at a 5.2% CAGR to stand at $22 billion by 2030.
Additionally, another crucial marker to analyze the state of the shipping industry is also showing positive signs. This indicator is the Jefferies Shipping Index, which is a list of top shipping stocks made by the research firm Jefferies. As of April 2022, the Jefferies shipping index was up by 25% annually, indicating that the industry is seeing increased investor confidence. This is believed to be resulting from higher demand for tankers in the aftermath of the Russian invasion and strong performance by the tanker and dry bulk subsegments of the industry.
In this article our focus would be dividend-paying shipping stocks. Some stocks with the highest dividend yields in the industry are Genco Shipping & Trading Limited (NYSE:GNK), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), and Golden Ocean Group Limited (NASDAQ:GOGL).
Photo by Shaah Shahidh on Unsplash
Our Methodology
In order to pick out the best shipping industry stocks, we took a broad look at the industry to determine which stocks pay dividends and are performing well. These were then studied through their analyst reports, earnings, large shareholders, and hedge fund sentiment courtesy of Insider Monkey’s 912 hedge fund survey for the first quarter of this year in order to better understand their operating environment and performance.
Best Shipping Stocks That Pay Dividends
9. Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN)
Number of Hedge Fund Holders: 6
Dividend Yield as of June 10, 2022: 7.71%
Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN) is a dry bulk carrier and tanker shipping company. The company charters its vehicles and operates them to serve the needs of several different industries. These include coal, steel, forestry, ore, grain, and steel. Additionally, it also ships petroleum and associated products. Grindrod Shipping Holdings Ltd. is headquartered in Singapore and is more than a hundred years old after being founded in 1910.
By the end of its fiscal Q1, Grindrod Shipping Holdings Ltd. reported that it had earned $110 million in revenue and $1.6 in non-GAAP EPS. Despite the fact the results saw its revenue grow annually, the company’s shares dropped in the stock market after the results came out. As part of the earnings, its chief executive officer explained that the quarter saw the company work with record charter rates and at the same time he announced a $0.47 dividend per share.
Grindrod Shipping Holdings Ltd.’s dividend yield as of June 2022 was 7.71%. Insider Monkey analyzed 912 hedge fund portfolios for Q1 2022 and discovered that six had bought the company’s shares. Jefferies increased the company’s share price target to $26 from $24 in April 2022.
ZIM Integrated Shipping Services Ltd., Genco Shipping & Trading Limited, and Golden Ocean Group Limited are met by Grindrod Shipping Holdings Ltd. in the list of shipping stocks that pay hefty dividends.
8. GasLog Partners LP (NYSE:GLOP)
Number of Hedge Fund Holders: 8
Dividend Yield as of June 10, 2022: 0.58%
GasLog Partners LP (NYSE:GLOP) is a European company that is headquartered in Piraeus, Greece. The company, as its name suggests, exclusively services the ocean shipping needs of the energy industry. It does so via chartering its liquefied natural gas (LNG) tanker ships on a multi-year basis to those that require its services.
Citi raised GasLog Partners LP’s share price target to $5.5 from $5 in May 2022, and it justified the decision by outlining that higher demand for LNG can help the company with its balance sheet problems. Insider Monkey’s research of 912 hedge fund portfolios for this year’s March quarter revealed that eight had held a stake in the company.
GasLog Partners LP raked in $85 million in revenue and $0.41 in non-GAAP EPS for its first fiscal quarter, in a strong set of results that beat Wall Street analyst estimates for both metrics. During the earnings event, its CEO cited confidence in the LNG market, stating that demand for the fuel has increased in the aftermath of the Russian invasion of Ukraine. As of June 10, 2022, GasLog Partners LP had a 0.58% dividend yield.
GasLog Partners LP’s largest investor is Jim Simons’s Renaissance Technologies which owns 695,411 shares that are worth $3.9 million.
7. Navios Maritime Partners L.P. (NYSE:NMM)
Number of Hedge Fund Holders: 9
Dividend Yield as of June 10, 2022: 0.69%
Navios Maritime Partners L.P. (NYSE:NMM) is a dry cargo vessel operator based in Monaco. The company also provides transportation services for petroleum products. Some of the products that its vessels can carry are iron ore, fertilizers, crude oil, containers, and refined petroleum. It has different sized ships in its portfolio, ranging from the Panamax carrier to the Ultra Handymax.
During its fiscal Q1, Navios Maritime Partners L.P. brought in $236 million in revenue and $2.78 in non-GAAP EPS. The results marked a strong recovery for the company as it saw its revenue grow by a whopping 263% annually during the quarter. Jefferies set a $55 price target for the company in March 2022, explaining that maritime rates are increasing.
Navios Maritime Partners L.P. had a dividend yield of 0.69% during June 2022, and nine of the 912 hedge fund portfolios part of Insider Monkey’s Q1 2022 research had bought a stake in the company.
Thomas E. Claugus’s GMT Capital is Navios Maritime Partners L.P.’s largest investor. It owns 594,654 shares that are worth $20 million.
6. Costamare Inc. (NYSE:CMRE)
Number of Hedge Fund Holders: 13
Dividend Yield as of June 10, 2022: 3.46%
Costamare Inc. (NYSE:CMRE) is another maritime shipping company that is based in Monaco. The firm focuses primarily on providing containerships to carriers. It has dozens of charter ships and dry bulk carriers in its portfolio and operates via chartering its vessels.
Costamare Inc. raked in $268 million in revenue and $0.84 in non-GAAP EPS for its fiscal first quarter. This was a strong set of results that saw the company beat Wall Street analyst estimates for both metrics. During its earnings, the firm’s chief financial officer outlined that Costamare Inc. had benefitted from a rebound in the container shipping industry. The firm had a dividend yield of 3.46% as of June 10, 2022.
Stifel lowered Costamare Inc.’s share price target to $16 from $17 in May 2022, as it outlined that the firm’s decision to cancel shipbuilding contracts was disappointing due to their favorable rates, but that the cancellation will help with liquidity. By the end of this year’s March quarter, 13 of the 912 hedge funds polled by Insider Monkey had invested in the company.
Costamare Inc.’s largest investor is Jim Simons’s Renaissance Technologies. It owns two million shares that are worth $37 million.
Along with Genco Shipping & Trading Limited, ZIM Integrated Shipping Services Ltd., and Golden Ocean Group Limited, Costamare Inc. is a top shipping stock with strong dividends.
5. Golden Ocean Group Limited (NASDAQ:GOGL)
Number of Hedge Fund Holders: 15
Dividend Yield as of June 10, 2022: 14.58%
Golden Ocean Group Limited is a dry bulk shipping vessel operator that is headquartered in Bermuda. The company owns some of the largest vessels in the world, belonging to the Ultramax category. It transports goods such as commodities and operates in the spot and charter markets.
Golden Ocean Group Limited posted $265 million in revenue and $0.62 in GAAP EPS for its first quarter earnings, in a strong set of results that saw it beat analyst estimates for both the metrics. H.C. Wainwright increased the company’s share price target to $18 from $13 in May 2022, outlining that capesize freight rates will help the company.
As of June 10, 2022, Golden Ocean Group Limited had a dividend yield of 14.58%, one of the highest on our list. 15 out of the 912 hedge funds part of Insider Monkey’s Q1 2022 survey had bought the company’s shares.
Golden Ocean Group Limited’s largest investor is Jim Simons’s Renaissance Technologies which owns 3.6 million shares that are worth $45 million.
4. Scorpio Tankers Inc. (NYSE:STNG)
Number of Hedge Fund Holders: 18
Dividend Yield as of June 10, 2022: 1.07%
Scorpio Tankers Inc. (NYSE:STNG), as the name suggests, is a shipping company that transports petroleum products. The company is based in Monaco and it has hundreds of tankers in its portfolio.
BTIG raised Scorpio Tankers Inc.’s share price target to $42 from $31 in June 2022, outlining that the company’s cash flows are benefiting from the rate increases in product tankers. The company had a dividend yield of 1.07% as of June 2022.
As its fiscal Q1 came to an end, Scorpio Tankers Inc. had raked in $174 million in revenue and -$0.27 in non-GAAP EPS, beating analyst estimates for both metrics. By the end of this year’s first quarter, 18 out of 912 hedge funds profiled by Insider Monkey had invested in the firm’s shares.
Jeremy Hosking’s Hosking Partners is Scorpio Tankers Inc.’s largest investor. It holds a $14 million stake in the company which comes through 695,899 shares.
3. Genco Shipping & Trading Limited (NYSE:GNK)
Number of Hedge Fund Holders: 19
Dividend Yield as of June 10, 2022: 13.25%
Genco Shipping & Trading Limited is an American dry bulk ocean transportation company. It has more than four million tons of aggregate capacity and operates some of the largest ships in the world. The company is headquartered in New York, New York.
Genco Shipping & Trading Limited reported $136 million in revenue and $0.97 in GAAP EPS for its fiscal first quarter, managing to beat analyst revenue estimates for both metrics. B. Riley increased the company’s share price target to $31 from $27 in May 2022, as it explained that the company is maximizing operational cash flows for healthy dividend rates. This is reflected in its latest dividend yield, which stands at 13.25%.
Insider Monkey conducted in depth research of 912 hedge fund portfolios for Q1 2022. Through this, we discovered that 19 had invested in Genco Shipping & Trading Limited.
Out of these, Mark T. Gallogly’s Centerbridge Partners is Genco Shipping & Trading Limited’s largest investor through owning a $107 million stake.
2. Danaos Corporation (NYSE:DAC)
Number of Hedge Fund Holders: 20
Dividend Yield as of June 10, 2022: 3.99%
Danaos Corporation (NYSE:DAC) is another Greek shipping company that is headquartered in Piraeus. It primarily focuses on operating containerships and provides its services to companies in Australia, Europe, Asia, and the United States of America.
Danaos Corporation announced in April 2022 that it had placed an order for 7,200 twenty-foot equivalents (TEU) containerships that will be built according to modern standards. This marks the company’s optimism in the shipping industry recovering from the devastating blow of the coronavirus. Citi increased its price target to $115 from $90 in February 2022, stating that strong charting activity is helping the company.
For its fiscal first quarter results, Danaos Corporation earned $229 million in revenue and $11.36 in non-GAAP EPS, boosting its ability to pay dividends. The firm’s dividend yield stood at 3.99% as of June 10, 2022, and 20 out of 912 hedge funds part of Insider Monkey’s Q1 2022 research had bought its shares.
Danaos Corporation’s largest investor is Robert Bishop’s Impala Asset Management which owns 769,471 shares that are worth $78 million.
1. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Holders: 32
Dividend Yield as of June 10, 2022: 19.5%
ZIM Integrated Shipping Services Ltd. is an Israeli container shipping company. It operates more than a hundred different vessels, for transporting cars and other goods.
ZIM Integrated Shipping Services Ltd. raked in $3.7 billion in revenue and $14.19 in GAAP during its first fiscal quarter, in a record set of results that also beat analyst estimates for both the metrics. The company announced a massive $10.31 dividend per share for shareholders in March 2022.
Jefferies raised its price target on the stock to $120 from $100 in March 2022, stating that strong dividends and earnings influenced the decision. ZIM Integrated Shipping Services Ltd. has the highest dividend yield of 19.5% on our list, with 32 out of the 912 hedge funds analyzed by Insider Monkey for this year’s March quarter having held a stake in the company.
Jim Simons’s Renaissance Technologies is ZIM Integrated Shipping Services Ltd.’s largest investor. It holds a $295 million stake that comes through 4 million shares.
Suggested articles:
- 10 LNG Shipping Stocks to Buy Now
- 10 Best Semiconductor Stocks to Buy for 2022
- 10 Best Fast Food Stocks to Buy Now
This article is originally published at Insider Monkey.
