Shipping is one of the oldest services on the planet, with the Greeks crediting it as their very first organized industry. With such a long history as a trade, we thought it might be interesting to take a closer look as modern day shipping companies. Specifically, we wanted to find out which modern marners were the fundamentally strongest practitioners of an ancient, yet still thriving profession.
To find the strongest shipping stocks on the market, we looked for companies that had all four of the following attributes:
1) P/S Ratio Higher than 1:
The P/S value represents the value placed on sales by the market. To put it simply, if sales are not high in services, the company ceases to exist.
2) A Dividend Yield Higher Than 1%
All service companies need to be in stable arenas. A company that can divvy out profits shows that it is in a comfortable place. Of course, as stated earlier shipping is one of the most stable arenas in all of services, with a track record going back to the Classical Age.
3) Operating Margin Over 20%
Operations are an essential part of the services industry, and shipping is no diferent.
4) Analyst Consensus of “Buy” or Better
While we trust our advanced metrics, it does not hurt to have analyst consensus on your side.
After applying these metrics to all the shipping companies trading on American markets, we found ten shipping company stocks that pass muster:
Navios Maritime Holdings Inc. (NM) and Navios Maritime Acquisition Corporation ($NNA)
Navios Maritime Holdings operates long-term charters and organizes complex bulk cargo logistics. Their operations span the Atlantic seaboard, with offices in Paraguya, Uruguay, Argentina, Greece, and Connecticut.
Navios Acquisitions, spun off from Holdings in 2008, owns and operates oil tankers and other bulk liquid shipping vessels. The company acquired 12 vessels worth $342.3 million in 2013, and in their Q2 2013 earnings report announced a 30 percent increase in revenue.
Navios Maritime Holdings is up 109.22 percent to hit $7.21 a share. Navios Acquisitions is up 53.88 percent to hit $3.76 a share.
Golar LNG Ltd. (GLNG)
Golar’s fleet is comprised of “LNG” carriers. LNG stands for liquefied natural gas, a market that is currently undergoing tremendous growth. Golar was officially formed in 2001, but it traces its roots as a shipping company back to 1946, when it was called the Gotaas-Laresen Shipping Company.
The Bermuda-based Golar is up 7.42 percent on the year to hit $38.53 a share.
Safe Bulkers, Inc. (SB)
Unlike most of the other companies on this list, Safe Bulkers does not ship gas or oil, but rather deals in dry shipping. The company some 2.5 million tons of commodities a year, mainly grain, iron ore, and coal.
This Greek shipping company is up a whopping 110.33 percent on the year to hit $6.92 a share.
GasLog Ltd. (GLOG)
Like Golar, GasLog engages in LNG transportation. Their fleet is comprised of 18 carriers, and is growing rapidly. In their 2013 second quarter earnings report, GasLog raked in $10.315 million in adjusted profit against $4.65 million the year prior.
GasLog is up 22.61 percent on the year to hit $14.86 a share.
KNOT Offshore Partners LP (KNOP)
This company is notable for being the only one on the list that has an analyst consensus of Strong Buy. This British company owns and operates shuttle tankers and long-term charters. KNOT often works under contract of several European gas and oil companies, notably BG Group, Transpetro and Statoil.
KNOT is up 12.74 percent on the year to hit $24.25 a share.
Costamere Inc. (CMRE)
Costamere leases out container ships to several major shipping companies. Like Safe Bulkers, they diod not involve themselves in gas and oil shipping, but rather in container shipping. The company has been involved in shipping for 37 years, with 27 years in containers.
Costamere is up 33.99 percent on the year to hit $17.74 a share.
Teekay Offshore Partners LP (TOO)
Teekay, like the majority of the companies on this list, dervies stability from working extensively with oil companies. Teekay, in fact, is the largest owner and operator of oil tankers in the world,with the majority of their routes centered in the North Sea.
The company is up 23.49 percent on the year to hit $33.41 a share.
Ship Finance International Limited (SFL)
Ship Finance Interaional is a diversified fleet of 61 ships that move both crude oil, chemicals, dry bulk and cars.The company was created in 2003 as a wholly owned subsidiary of Frontline before being patially spun off in 2004.
This Bermudan shipping company is down 9.32 percent on the year to hit $15.32 a share.
Capital Product Partners L.P. (CPLP)
Like Shipping Finance International, Capital Product Partners is very diversified, engaging in oil, dry goods, and contaner shipping. The Greek Capital Product Partners has been in operation since 2007, and sports a fleet of 27 ships.
Capital Product Partners is up 30.98 percent on the year to hit $8.92 a share.