The logistics market is considered integral for modern society, owing to rapid urbanization and surging consumer demand. Also, the industry is undergoing a drastic transformation with the growing adoption of advanced and innovative digital technologies.
Given the industry’s promising prospects, it could be wise to invest in quality logistics stocks ZIM Integrated Shipping Services Ltd. (ZIM), Teekay Corporation Ltd. (TK), and Matson, Inc. (MATX) for substantial gains.
Logistics needs are growing around the globe due to the increasing reliance on online shopping for convenience, robust economic growth, and technological advancements such as AI, IoT, cloud computing, and more. The logistics industry is essential to supply chain management and is expected to witness steady growth in the coming years.
The logistics market is currently experiencing robust growth, fueled by rapid e-commerce expansion, cost-efficiency, rising technological advancements, trade globalization, increasing focus on environmental sustainability, and rising consumer demand for faster delivery systems.
Revenue in the global logistics market is expected to reach a staggering $5.70 trillion in 2024 and is anticipated to exhibit a CAGR of 4%, resulting in a market volume of $8.10 trillion by 2033.
Besides, as technology, geopolitics, and climate change continue to push supply chain management trends to evolve continuously to keep up with global demand, the logistics market's prospects look robust. Also, expanding consumer expectations and global trades are urging increasing efficiency and advancements in logistics operations.
Given these favorable trends, let’s look at the fundamentals of the three Shipping stocks, beginning with the third choice.
Stock #3: ZIM Integrated Shipping Services Ltd. (ZIM)
Based in Haifa, Israel, ZIM provides container shipping and related services internationally. The company offers door-to-door and port-to-port transportation services for various types of customers, including end-users, consolidators, and freight forwarders.
On September 9, ZIM entered into a new long-term operational cooperation with Mediterranean Shipping Company (MSC) on the Asia - US East Coast and Asia and US Gulf trades, scheduled to be launched in February 2025. The strategic collaboration reflects ZIM's commitment to delivering outstanding shipping solutions and enhancing network efficiencies.
For the third quarter that ended September 30, 2024, ZIM’s income from voyages and related services increased 117.2% year-over-year to $2.77 billion. The company’s adjusted EBITDA rose 625.6% from the prior year’s quarter to $1.53 billion. Its net income and EPS came in at $1.13 billion and $9.34, compared to a net loss of $2.27 billion and $18.90 during the prior year’s quarter.
Additionally, the company’s free cash flow rose 343.3% from the year-ago value to $1.45 billion.
Street expects ZIM’s revenue for the fourth quarter (ending December 2024) to increase 65.3% year-over-year to $1.99 billion, while its EPS is expected to be $3.19 for the same period.
Shares of ZIM have gained 32.8% over the past six months and 249.1% over the past year to close the last trading session at $24.23.
ZIM’s robust outlook is reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Growth and Value. It is ranked #19 out of 34 stocks in the A-rated Shipping industry.
Click here to access additional ZIM ratings for Quality, Sentiment, Stability, and Momentum.
Stock #2: Teekay Corporation Ltd. (TK)
Headquartered in Hamilton, Bermuda, TK engages in crude oil and other marine transportation services worldwide. The company owns and operates crude oil and refined product tankers and also offers ship-to-ship support services, tanker commercial management operation services, and operational and maintenance marine services.
TK's trailing-12-month EBIT margin of 29.77% is 50.6% higher than the industry average of 19.77%. Likewise, the stock's trailing 12-month levered FCF margin of 26.99% is significantly higher than the industry average of 6.85%. Also, its trailing-12-month ROCE of 19.16% is 55.2% higher than the 12.35% industry average.
On October 30, TK's Board of Directors declared a one-time special cash dividend in the amount of $1.00 per outstanding common share. This dividend is payable on December 18, 2024, to all Teekay shareholders of record on December 4, 2024.
During the third quarter that ended September 30, 2024, TK reported revenues of $272.62 million, and its income from vessel operations was $52.19 million for the same period. Adjusted net income attributable to shareholders of Teekay came in at $21.10 million and $0.23 per share for the quarter, respectively.
In addition, the company’s total assets stood at $2.23 billion as of September 30, 2024, compared to $2.20 billion as of December 31, 2024.
Shares of TK surged 10.5% year-to-date and 10.6% over the past year to close the last trading session at $7.90.
TK’s POWR Ratings reflect its promising prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has an A grade for Quality and Value. It also has a B for Sentiment. TK is ranked #7 of 34 stocks within the A-rated Shipping industry.
To see additional POWR Ratings of TK for Growth, Stability, and Momentum, click here.
Stock #1: Matson, Inc. (MATX)
MATX engages in ocean transportation and logistics services. The company operates through two segments: Ocean Transportation and Logistics. The company offers ocean freight transportation services to the domestic non-contiguous economies.
On October 25, MATX's Board of Directors declared a fourth-quarter dividend of $0.34 per common share. The dividend is payable on December 5, 2024, to all shareholders of record as of the close of business on November 7, 2024.
MATX pays an annual dividend of $1.36, which translates to a yield of 0.90% at the current share price. Its four-year average dividend yield is 1.38%. Moreover, the company’s dividend payouts have increased at a CAGR of 8.9% over the past five years. MATX has raised its dividends for 11 consecutive years.
For the third quarter that ended September 30, 2023, MATX’s total operating revenue increased 16.3% year-over-year to $962 million. Its operating income rose 83.4% from the prior year’s quarter to $242.30 million. Also, the company’s net income and EPS totaled $199.10 million and $5.89, up 66.1% and 73.2% year-over-year, respectively.
Furthermore, the company’s EBITDA grew 65.3% from the year-ago value to $289.40 million.
Analysts expect MATX’s revenue for the fourth quarter (ending December 2024) to increase 7.9% year-over-year to $851.50 million. The company’s EPS for the ongoing period is expected to grow 79.6% year-over-year to $3.20. Moreover, the company topped the consensus EPS estimates in all of the trailing four quarters.
MATX’s stock has gained 31.7% over the past six months and 59% over the past year to close the last trading session at $152.64.
MATX’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
MATX has a B grade for Quality and Growth. Within the same industry, MATX is ranked #5 of 34 stocks.
In addition to the POWR Ratings stated above, one can access MATX’s Value, Sentiment, Momentum, and Stability ratings here.
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MATX shares were trading at $154.00 per share on Friday morning, up $1.36 (+0.89%). Year-to-date, MATX has gained 41.96%, versus a 26.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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