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Highest Shipping Stocks in Q42023

The price of the top shipping stocks, including Seacor Marine Holdings Inc., Nordic American Tankers Ltd., and Safe Bulkers Inc., has risen by more than 25% this past year. Shipping stocks, represented by the Dow Jones U.S. Marine Transportation Index, have been doing well overall, rising 18% over the past 12 months compared with the 12% gain for the Russell 1000, a benchmark index for U.S. stocks.

Below, we review the top shipping stocks in three categories: value, growth, and momentum. All data is as of Oct. 18, 2023.

Best Value Shipping Stocks

These shipping stocks have the lowest 12-month trailing price-to-earnings (P/E) ratio. Investors who prefer value metrics typically think a firm's fundamentals should ultimately determine a rise in price relative to other stocks. The P/E ratio is a company's stock price relative to its earnings per share. A P/E ratio can help you determine whether a stock is overpriced or trading at a discount relative to the market or its peers.

Best Value Shipping Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
ZIM Integrated Shipping Services Ltd. (ZIM) 9.17 1.1 0.8
Costamare Inc. (CMRE) 9.31 1.1 2.3
Ardmore Shipping Corp. (ASC) 13.53 0.6 3.1

Source: YCharts

  • ZIM Integrated Shipping Services Ltd.: An Israel-based marine transport and logistics company, ZIM provides cargo services worldwide. This past month, ZIM announced the launch of two new services: ZIM Albatross for premium direct connection service from and to North China, Korea, Mexico, and the West Coast of South America that begins in December, and ZIM Gulf Toucan, a service connecting the East Coast of South America to the Gulf of Mexico and U.S. that starts in January.
  • Costamare Inc.: Based in Monaco, the company ships cargo internationally on its 100 vessels. Costamare Inc.'s annual revenue has risen about 29.9% on average for the last three years, outperforming about 89% of its peers.
  • Ardmore Shipping Corp.: Ardmore Shipping Corp. transports petroleum products and other related goods with its fleet of over 20 vessels. In the last reported quarter, Ardmore Shipping announced revenues of $$60.4 million, representing a year-over-year change of -8.4%. Additionally, it had an EPS of $0.57 for the same period compared with $0.81 a year ago.

Fastest-Growing Shipping Stocks

The top shipping stocks are ranked below using a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-on-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Putting these measures together can help determine a company's financial health and growth prospects while putting aside reporting anomalies, such as one-off restructuring costs or licensing agreements. (Companies with quarterly EPS or revenue growth of more than 1,000% have been excluded as outliers.)

Fastest Growing Shipping Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Kirby Corp. (KEX) 82.75 4.9 102 11
Nordic American Tankers Ltd. (NAT) 4.20 0.9 N/A (see company description) 284
Costamare Inc. (CMRE) 9.31 1.1 N/A (see company description) 26

Source: YCharts

  • Kirby Corp.: A marine transportation company, Kirby ships bulk liquid and dry products and related equipment through intracoastal waterways in the U.S. For its most recently reported quarter, Kirby had net earnings of $57.4 million or $0.95 per share, compared with earnings of $28.5 million or $0.47 per share for the same quarter a year earlier.
  • Nordic American Tankers Ltd.: The Bermuda-based tanker company operates and charters 19 vessels. Nordic American Tankers doesn't have an EPS growth figure in the table because the company reported a net loss per share in the first quarter of 2022.
  • Costamare Inc.: See the company description above.

Shipping Stocks With the Most Momentum

These shipping stocks had the highest total return over the last 12 months, along with two indexes for comparison.

Shipping Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Seacor Marine Holdings Inc. (SMHI) 14.42 0.4 115
Nordic American Tankers Ltd. (NAT) 4.20 0.9 45
Safe Bulkers Inc. (SB) 3.36 0.4 27
Russell 1000 Index N/A N/A 12
Dow Jones U.S. Marine Transportation Index N/A N/A 18

Source: YCharts

  • Seacor Marine Holdings Inc.: A transportation service firm, Seacor supports offshore oil and natural gas rigs and similar facilities. Seacor's reported earnings for its most recent quarter had its net loss shrinking by 76% while its total revenue had grown 24% YOY. Direct vessel profit margins for the company have increased by over 200% since the second quarter of 2022.
  • Nordic American Tankers: See the company description above.
  • Safe Bulkers Inc.: A marine transport company based in Monaco, Safe Bulkers operates dry bulk vessels. The company primarily transports coal, iron ore, and coal with its fleet of 45 vessels.

Trends in the Shipping Industry

The long-tail effects of the pandemic are still being felt in the sector. At the same time, ocean shipping rates are reverting to pre-pandemic levels, which is at odds with some who thought industrywide factors might mean freight rates would remain at their higher levels.

The growth of e-commerce continues to drive shifts in shipping and logistics, and global shipping companies reported historically high profits once demand soared after the pandemic supply crisis. Recently, though, the shipping giant Maersk warned of growing trade problems, in particular the tensions between the U.S. and China, as well as other factors that could reduce consumer demand and raise inventory levels.

Advances in technology continue to remake the industry, with supply automation, robotics, remote and real-time monitoring, and autonomous shipping coming on board to increase transportation efficiency.

Advantages of Shipping Stocks

The shipping industry is indispensable for global trade, moving food, fuel, raw materials, and manufactured products weighing roughly 11 billion tons annually. One advantage of shipping stocks is their ability to reflect the global economy's health. A thriving economy boosts demand for shipping services, potentially elevating the stocks of shipping companies, while a sputtering global economy can cause the reverse.

Diversification is another advantage for those taking stakes in shipping stocks. The sector offers diversification for a portfolio since its reach is global. The expanse of the shipping industry means those buying shares are tapping into emerging markets and other burgeoning regions.

Shipping companies also generally offer a hedge against inflation since shipping costs usually rise with inflation, along with shipping company revenues. Shipping stocks are backed by tangible assets: fleets of ships and valuable transportation equipment that can backstop shareholder value. Shipping firms also typically offer dividends and the promise of a regular income stream for investors.

According to a study by the European Environmental Agency, the shipping industry has lower greenhouse emissions than other forms of transportation like road transport and aviation. This could be an important factor for investors who prefer to invest in industries that are less harmful to the environment.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above stocks.


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