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Shipping Industry Rises 20% Year to Date: 3 Stocks to Buy
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The Zacks Transportation - Shipping industry is benefiting from the upbeat liquefied petroleum gas (LPG) demand. The buoyant demand scenario pertaining to the export of LPG, like propane, has served the U.S. economy well. The country is the largest exporter of gases like propane and butane. This has boosted the prospects of transporters of LPG. Notably, seaborne LPG gas volumes have been on the rise since the pandemic.
Moreover, the tensions in the Red Sea and the resultant limited container availability have increased freight costs. The re-opening of the China economy has also boosted the industry participants. A strong outlook for the Capesize market also bodes well for shipping stocks.
Additionally, as fuel expenses represent a key input cost for any transportation player, the fall in oil prices bodes well for the bottom-line growth of shipping stocks. Notably, oil prices declined 1.9% in the April-June period.
The buoyancy in the industry is further confirmed by its Zacks Industry Rank #41, which places it in the top 16% of more than 250 Zacks industries.
Notably, the industry has gained 20% so far this year, outperforming the S&P 500 Index’s northward movement of 16.1% and a 4.1% decline of the Zacks Transportation sector.
Image Source: Zacks Investment Research
Investing in Shipping Stocks: A Prudent Idea
Given this encouraging backdrop, we present three shipping stocks,Kirby Corporation (KEX - Free Report) , ZIM Integrated Shipping Services Ltd. (ZIM - Free Report) and Teekay Tankers Ltd. (TNK - Free Report) , which investors can bet on.
The aforementioned stocks currently have a Zacks Rank #2 (Buy), a VGM Score of A or B and a solid expected earnings growth rate for the current year. These stocks have also witnessed upward estimate revisions in the past 90 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities for investors. The selected companies appear to be compelling investment propositions at the moment.
Also, each stock has gained more than 30% year to date and has outperformed the industry.
Image Source: Zacks Investment Research
Each stock has a market capitalization of more than $1 billion.
Kirby: Headquartered in Houston, TX, Kirby operates domestic tank barges in the United States. Consistent shareholder-friendly initiatives and strong cash flow generating ability make Kirby a prudent investment option.
During the first quarter of 2024, Kirby repurchased 498,505 shares for $41.8 million. Such shareholder-friendly moves instill investor confidence and positively impact the company's bottom line. For 2024, Kirby expects to generate net cash from operating activities in the range of $600-$700 million. This expectation is higher than the $540.2 million generated in 2023.
Shares of KEX have surged 54.9% in the year-to-date period. KEX has a VGM Score of B.
The Zacks Consensus Estimate for KEX’s 2024 EPS has moved up 7.3% in the past 90 days. KEX has an expected earnings growth rate of 42.47% for 2024. KEX has a trailing four-quarter earnings surprise of 10.26%, on average.
KEX has a market capitalization of $7.07 billion.
ZIM Integrated Shipping: Headquartered in Haifa, Israel, the company provides container shipping and related services in Israel and internationally.
Shares of ZIM have surged 130.3% in the year-to-date period. ZIM has a VGM Score of A.
The Zacks Consensus Estimate for ZIM’s 2024 earnings has moved up more than 100% in the past 90 days. ZIM has an expected earnings growth rate of more than 100% for 2024.
ZIM has a market capitalization of $2.72 billion.
Teekay Tankers: Headquartered in Hamilton, Bermuda, Teekay Tankers offers marine transportation services to oil industries in Bermuda and internationally. TNK is gaining from the resumption of economic activities and the uptick in world trade. This is because the shipping industry is responsible for transporting several goods involved in world trade.
Shares of TNK have rallied 38.8% year to date. TNK has a VGM Score of A.
The Zacks Consensus Estimate for TNK’s 2024 EPS has moved up 2.8% in the past 90 days. TNK has an expected earnings growth rate of 1.59% for 2024.
TNK has a market capitalization of $2.34 billion.
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Shipping Industry Rises 20% Year to Date: 3 Stocks to Buy
The Zacks Transportation - Shipping industry is benefiting from the upbeat liquefied petroleum gas (LPG) demand. The buoyant demand scenario pertaining to the export of LPG, like propane, has served the U.S. economy well. The country is the largest exporter of gases like propane and butane. This has boosted the prospects of transporters of LPG. Notably, seaborne LPG gas volumes have been on the rise since the pandemic.
Moreover, the tensions in the Red Sea and the resultant limited container availability have increased freight costs. The re-opening of the China economy has also boosted the industry participants. A strong outlook for the Capesize market also bodes well for shipping stocks.
Additionally, as fuel expenses represent a key input cost for any transportation player, the fall in oil prices bodes well for the bottom-line growth of shipping stocks. Notably, oil prices declined 1.9% in the April-June period.
The buoyancy in the industry is further confirmed by its Zacks Industry Rank #41, which places it in the top 16% of more than 250 Zacks industries.
Notably, the industry has gained 20% so far this year, outperforming the S&P 500 Index’s northward movement of 16.1% and a 4.1% decline of the Zacks Transportation sector.
Image Source: Zacks Investment Research
Investing in Shipping Stocks: A Prudent Idea
Given this encouraging backdrop, we present three shipping stocks, Kirby Corporation (KEX - Free Report) , ZIM Integrated Shipping Services Ltd. (ZIM - Free Report) and Teekay Tankers Ltd. (TNK - Free Report) , which investors can bet on.
The aforementioned stocks currently have a Zacks Rank #2 (Buy), a VGM Score of A or B and a solid expected earnings growth rate for the current year. These stocks have also witnessed upward estimate revisions in the past 90 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities for investors. The selected companies appear to be compelling investment propositions at the moment.
Also, each stock has gained more than 30% year to date and has outperformed the industry.
Image Source: Zacks Investment Research
Each stock has a market capitalization of more than $1 billion.
Kirby: Headquartered in Houston, TX, Kirby operates domestic tank barges in the United States. Consistent shareholder-friendly initiatives and strong cash flow generating ability make Kirby a prudent investment option.
During the first quarter of 2024, Kirby repurchased 498,505 shares for $41.8 million. Such shareholder-friendly moves instill investor confidence and positively impact the company's bottom line. For 2024, Kirby expects to generate net cash from operating activities in the range of $600-$700 million. This expectation is higher than the $540.2 million generated in 2023.
Shares of KEX have surged 54.9% in the year-to-date period. KEX has a VGM Score of B.
The Zacks Consensus Estimate for KEX’s 2024 EPS has moved up 7.3% in the past 90 days. KEX has an expected earnings growth rate of 42.47% for 2024. KEX has a trailing four-quarter earnings surprise of 10.26%, on average.
KEX has a market capitalization of $7.07 billion.
ZIM Integrated Shipping: Headquartered in Haifa, Israel, the company provides container shipping and related services in Israel and internationally.
Shares of ZIM have surged 130.3% in the year-to-date period. ZIM has a VGM Score of A.
The Zacks Consensus Estimate for ZIM’s 2024 earnings has moved up more than 100% in the past 90 days. ZIM has an expected earnings growth rate of more than 100% for 2024.
ZIM has a market capitalization of $2.72 billion.
Teekay Tankers: Headquartered in Hamilton, Bermuda, Teekay Tankers offers marine transportation services to oil industries in Bermuda and internationally. TNK is gaining from the resumption of economic activities and the uptick in world trade. This is because the shipping industry is responsible for transporting several goods involved in world trade.
Shares of TNK have rallied 38.8% year to date. TNK has a VGM Score of A.
The Zacks Consensus Estimate for TNK’s 2024 EPS has moved up 2.8% in the past 90 days. TNK has an expected earnings growth rate of 1.59% for 2024.
TNK has a market capitalization of $2.34 billion.