Based in Haifa, Israel, ZIM Integrated Shipping Services Ltd. (ZIM) provides international container shipping and related services. The company offers shipping and logistics services. In comparison, Seanergy Maritime Holdings Corp. (SHIP), based in Athens, Greece, is an international shipping company engaged in the shipping of dry bulk cargo, primarily iron ore and coal, worldwide.
Thanks to a significant imbalance between supply and demand exacerbated by the Russian-Ukrainian war and China’s COVID-19 related shutdowns, most shipping operators saw solid demand. In addition, record freight rates due to strong international demand for manufactured goods are helping shipping companies increase their profit margins. Rapid digitalization, automation of logistics and growth in freight forwarding services across all industries are expected to drive the growth of the shipping market. According to a report by Market Research Future, the sea freight market is expected to grow at a pace 5.2% CAGR from 2022 to 2030. Therefore, ZIM and SHIP should benefit.
Over the past month, ZIM stock has gained 7.8% in price, while SHIP has negative returns. Additionally, ZIM’s 36.8% gains over the past nine months are significantly higher than SHIP’s 3% returns. Additionally, ZIM is the clear winner with gains of 53.3% compared to SHIP’s 14.1% returns in terms of past year performance.
But which of these two stocks is a better buy now? Let’s find out.
On March 30, 2022, ZIM announced a new charter transaction with a group of investors initiated by MPC Capital AG. Eli Glickman, President and CEO of ZIM, said, “We continue to advance our strategy of chartering highly versatile vessels to strengthen our business prospects, maintain our flexibility and strengthen our position as an innovative transportation provider. maritime.
On March 16, 2022, SHIP announced that it had completed marine biofuel trials in cooperation with one of its major charterers, NYK Line, on one of the company’s Capesize vessels. Stelios Psillakis, SHIP’s Technical Director, said: “We strongly believe that the use of biofuels, in combination with the energy saving devices installed or to be installed on our ships, will enable a smooth transition to an energy greener, while offering a competitiveness and compliance advantage for early adopters.
Recent financial results
ZIM’s revenue increased 210% year-over-year to $3.72 billion for its fiscal first quarter, ended March 31, 2022. The company’s adjusted EBITDA increased 209% from year-on-year to $2.53 billion, while its net profit was $1.71 billion. which represents a 190% year-on-year increase. Additionally, its EPS was $14.19, up 190% year-over-year.
SHIP’s revenue increased 166% year-over-year to $56.70 million for its fiscal fourth quarter, ended December 31, 2021. The company’s adjusted EBITDA increased 367% from year-over-year to $90.15 million, while its net profit was $27.90. million compared to a loss of $2.27 million in the prior year quarter.
Past and expected financial performance
Over the past three years, ZIM’s revenue and EBITDA have grown at CAGRs of 48.9% and 268.2%. Analysts expect ZIM’s revenue to grow 39.7% for the quarter ending June 30, 2022 and 23.2% in its fiscal year 2022. The company’s EPS is expected to rise 52. 2% for the quarter ending June 30, 2022, but decrease by 4.9% in fiscal 2022. .
By comparison, SHIP’s revenue and EBITDA grew at CAGRs of 18.7% and 54.3%, respectively, over the past three years. The company’s revenue is expected to increase 38.7% for the quarter ending June 30, 2022 and 10.6% in its fiscal year 2022. Its EPS is expected to increase 400% for the quarter ending June 30, 2022. June 30, 2022 and 10% during the 2022 financial year.
ZIM’s last 12 months revenue of $10.73 billion is significantly higher than SHIP’s $153.11 million. ZIM is also more profitable, with an EBIT margin and net income margin of 54.09% and 43.25%, respectively, compared to 42.58% and 27.01% for SHIP.
Additionally, ZIM’s respective ROE, ROA, and ROTC of 190.77%, 57.28%, and 72.33% are higher than SHIP’s 24.31%, 10.41%, and 10.88%.
In non-GAAP forward P/E terms, SHIP is currently trading at 4.07x, 146.7% higher than ZIM’s 1.65x. Additionally, SHIP’s forward EV/EBITDA ratio of 3.93x is 373.5% higher than ZIM’s 0.83x.
Thus, ZIM is relatively affordable here.
ZIM has an overall rating of B, which is equivalent to a buy in our own POWR Rankings system. In comparison, SHIP has an overall rating of C, which translates to Neutral. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.
ZIM has an A rating for value, which is consistent with their lead EV/S of 0.57x, which is 63.8% lower than the industry average of 1.57x. However, SHIP has a C rating for value, which is in line with its forward EV/S of 2.27x, which is 44% higher than the industry average of 1.57x.
Additionally, ZIM has a B rating for quality. This is justified given ZIM’s last 12-month asset turnover rate of 1.69%, which is 111.7% higher than the industry average of 0.80%. In comparison, SHIP has a quality rating of C, in line with its asset turnover rate of 0.39% over the last 12 months, which is 51.1% below the industry average of 0.80%. .
Among the 46 actions of the Dispatch industry, ZIM is ranked #9. In comparison, SHIP is ranked #36.
Beyond what I said above, we also scored stocks for Momentum, Growth, Stability and Sentiment. Click here to see all ZIM ratings. Also get all SHIP odds here.
The shipping industry is expected to grow exponentially with increasing demand this year and beyond. While ZIM and SHIP are both expected to win, we believe it is best to bet on ZIM now due to its lower valuation and higher profitability.
Our research shows that the odds of success increase when investing in stocks with an overall buy or strong buy rating. See all other top rated stocks in the shipping industry here.
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SHIP shares were trading at $1.18 per share on Thursday afternoon, up $0.04 (+3.07%). Year-to-date, SHIP has gained 33.92%, compared to a -17.24% rise in the benchmark S&P 500 over the same period.
At Nimesh Jaiswal a fervent interest in the analysis and interpretation of financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving the price of a stock is the key approach he follows while advising investors in his articles. After…