Best Shipping Stocks to Ride the Shipping Wave
Shipping delays persist throughout the supply chain with many anecdotes of packages arriving considerably late. However, shipping stocks have been doing considerably well lately. The Acadiana Advocate reported on a consumer paying $20 for next-day shipping yet not receiving her package for a week. This is just one of the countless cases of packages taking far longer than usual to be delivered.
These delays are problematic for consumers and manufacturers alike. But where there is a problem, there can also be an opportunity. For instance, some shipping stocks are seeing 1-year returns of several hundred percent.
No one knows exactly when supply chain disruptions will clear up, but experts believe it could take a while. 2022 could still see significant shipping delays. In order to take advantage of the boom in shipping investment, here are our top shipping stocks to buy:
Best Shipping Stocks to Add to Your Portfolio
Here, we’ll outline why the shipping stocks we picked are some of the best ones to consider adding to your portfolio.
Danaos
Based in Greece and named after the Greek mythological figure said to have built the first ship, Danaos (NYSE: DAC) owns large-size containerships. It charters its containerships on long-term fixed-rate contracts with large liner companies. Some of its ships are as large as 5 X 13,100 twenty-foot equivalent units (TEU).
Danaos has done quite well since the pandemic. Its market cap is around $1.4 billion with a P/E ratio of just 1.92 and an earnings per share (EPS) of 34. It also has a dividend yield of about 34.5%. The stock is likely to grow modestly over the next 12 months. But with current market volatility it has seen a recent drop off in share price. However, its Q2 2022 revenue shows strong growth year-over-year (YOY).
Euroseas
Euroseas (Nasdaq: ESEA) is a shipping company based in Athens, Greece. It has a sizable fleet of container carriers on the water with even more under construction. The deadweight tonnage (DWT) of its largest container is over 72,000 and it will be adding two more vessels with over 37,000 DWT each. Most of its carrier containers are feeder types, and both of the under-construction carriers are also feeders.
Euroseas stock is a shipping stock to buy because of its performance over the past year. It has a market cap of $168 million and a P/E ratio of 1.82. Its EPS is 17.82. This stock is considered undervalued and thus, some analysts expect it to grow 50% or more over the next year. Euroseas has increased its Q2 2022 net income by almost 290% YOY. Its net profit margin for last quarter was 63.4%, which is up 46% YOY.
Shipping Stocks to Buy: EuroDry
As you may have guessed, EuroDry (Nasdaq: EDRY) is a shipping company that operates dry bulk carriers. Its carriers ship iron ore, coal, grains and other minor bulks. It is another Greece-based company and was founded in 2018. It currently operates a fleet of 9 dry bulk vessels with DWT as high as 82,000.
EuroDry stock has a market cap of $41 million. Its P/E ratio is 0.82 and its EPS is 17.58. However, the stock is down about 50% in the past year. Fidelity says the stock is undervalued and has a growth stability rating of 98 out of 100. Plus, its Q2 net income is up almost 380% YOY and it posted a 50.6% net profit margin last quarter, which is a 222% increase YOY.
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The Bottom Line on the Best Shipping Stocks
All of these shipping stocks have shown strong performances over the past year, in spite of all the current market volatility. And as supply chain issues continue to plague us, these stocks could benefit.
As always make sure to base all investment decisions on your own research and due diligence. There is a wide world of investing opportunities to be explored…
About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.