The increasing adoption of advanced technologies and the expansion of the global supply chain will likely create ample growth opportunities in the shipping market. Therefore, investors could consider adding shipping stocks Danaos Corporation (DAC), Tsakos Energy Navigation Limited (TNP), and GasLog Partners LP (GLOP) to their watchlists this week.
Thanks to the increasing maritime shipping activities driven by the expansion of trade agreements among nations, the global shipping containers market is expected to expand at a CAGR of 4.6%, reaching $56.70 billion by 2028.
In addition, rising demand for the import/export of manufactured goods, the bulk transport of raw materials, and affordable food items are fueling the demand for waterborne freight transportation.
Moreover, the expansion of the global supply chain, the adoption of more open trade policies, and remarkable advancements in waterborne shipping technology have not only fostered the trade of intermediate and manufactured goods but also led to a substantial decrease in coordination and transportation expenses.
As a result, the global cargo shipping market is projected to grow at a CAGR of 2.5% until 2028.
Let’s discuss the stocks mentioned above in detail:
Danaos Corporation (DAC)
Based in Piraeus, Greece, DAC owns and operates containerships in Australia, Asia, Europe, and the United States. The company offers seaborne transportation services, such as chartering its vessels to liner companies.
DAC pays $3 annually as dividends. This translates to a yield of 4.60% at the current price, compared to the four-year average dividend yield of 1.66%.
DAC’s trailing-12-month net income margin of 37.1% is 485.1% higher than the 6.35% industry average. Its trailing-12-month gross profit margin of 79.19% is 165.4% higher than the 29.83% industry average.
During the fiscal first quarter ended March 31, 2023, DAC’s operating revenues increased 5.9% year-over-year to $243.57 million. Adjusted net income came in at $145.26 million, while its adjusted earnings per share came in at $7.14. Also, adjusted EBITDA came in at $179.04 million.
DAC’s revenue is expected to be $227.38 million for the fiscal second quarter ending June 2023. Its EPS is expected to be $6.93 in the same quarter. Also, it has surpassed revenue estimates in each of the trailing four quarters, which is impressive.
Shares of DAC have gained 25.3% year-to-date to close the last trading session at $66.
DAC’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Quality and a B in Value. It is ranked #6 out of 42 stocks in the B-rated Shipping industry.
Beyond what is stated above, we’ve also rated DAC for Growth, Momentum, Sentiment, and Stability. Get all DAC ratings here.
Tsakos Energy Navigation Limited (TNP)
Based in Athens, Greece, TNP provides seaborne crude oil and petroleum product transportation services worldwide. The company offers marine transportation services for national, major, and other independent oil companies and refiners under long, medium, and short-term charters.
TNP pays $0.60 annually as dividends. This translates to a yield of 3.25% at the current price, compared to the 4-year average dividend yield of 2.78%.
TNP’s trailing-12-month gross profit margin of 55.36% is 17.9% higher than the 46.94% industry average. Its trailing-12-month net income margin of 38.61% is 152.7% higher than the 15.28% industry average.
TNP’s voyage revenues rose 74.5% year-over-year to $261.21 million in the fiscal first quarter that ended March 31, 2023. Operating income increased significantly year-over-year to $199.15 million. Net income increased significantly year-over-year to $177.46 million. Also, its earnings per share came in at $5.69, compared to a loss per share of $0.12 in the previous-year quarter.
Analysts expect TNP’s revenue to increase 33.9% year-over-year to $206.20 million for the fiscal second quarter ending June 2023. Its EPS is expected to rise 66.3% year-over-year to $2.66 for the same quarter.
The stock has gained 90.9% over the past year to close the last trading session at $18.48.
TNP’s robust prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
TNP has an A grade for Sentiment and a B in Growth, Value, and Momentum. It is ranked #5 in the same industry.
Click here to see TNP’s additional POWR Ratings for Stability and Quality.
GasLog Partners LP (GLOP)
GLOP acquires, owns, and operates liquefied natural gas carriers and provides LNG transportation services worldwide.
GLOP pays $0.04 annually as dividends. This translates to a yield of 0.47% at the current price, compared to the 4-year average dividend yield of 14.33%.
Its trailing-12-month gross profit margin of 79.98% is 70.4% higher than the 46.94% industry average. Its trailing-12-month net income margin of 31.30% is 104.8% higher than the 15.28% industry average.
GLOP’s revenue increased 15.9% year-over-year to $99.07 million in the fiscal first quarter that ended March 31, 2023. Also, adjusted profit increased 38.7% year-over-year to $36.38 million and adjusted EPU increased 51.2% year-over-year to $0.62.
GLOP’s EPS is expected to increase 14% year-over-year to $0.42 for the fiscal second quarter ending June 2023. Also, it has surpassed revenue estimates in each of the trailing four quarters.
GLOP gained 42.2% over the past nine months to close its last trading session at $8.59.
GLOP’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
GLOP also has an A grade for Momentum and Quality and a B in Sentiment. It is ranked #7 in the same industry.
For additional ratings for GLOP’s Value, Stability, and Growth, click here.
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DAC shares were trading at $65.20 per share on Friday morning, down $0.80 (-1.21%). Year-to-date, DAC has gained 26.99%, versus a 15.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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