In this article, we discuss the 8 best marine shipping stocks to invest in along with the latest updates around the industry.
The Maritime Freight Transport industry plays a significant role in global trade as it handles about 90% of it. The expansion of seaborne trade is benefiting consumers worldwide by providing competitive freight rates. According to Mordor Intelligence, the industry is projected to grow from approximately $381.69 billion in 2024 to around $471.81 billion by 2029, at a compound annual growth rate (CAGR) of 4.33%.
The Evolution of Shipping in a Changing World
According to a KPMG report posted in May, the global shipping industry is on an upward trend despite challenges like vessel accessibility, labor shortages, and geopolitical instability. Around 83% of the world fleet consists of small to medium-sized ships, with small vessels making up 38% by number but only 1% by tonnage. Increasing container ship availability is expected to stabilize freight rates and restore the supply-demand balance.
Port delays and logistical bottlenecks are expected to ease, but geopolitical conflicts, especially in Ukraine and the Middle East have disrupted some important shipping routes, which have led to longer, costlier voyages. The industry faces a potential shortage of maritime officers by 2026 and women make up only 2% of the workforce.
Despite these challenges, global economic growth of 3% annually will support seaborne trade expansion. Freight rates have returned to pre-pandemic levels, as tanker demand remains strong due to a 1.9% fleet growth in 2023. Additionally, LNG demand is expected to stabilize the market, while container freight rates are recovering due to voyage restrictions and reduced vessel availability.
Trends Shaping the Industry
According to the above-mentioned KPMG report, the shipping and port industries are experiencing transformative trends that are influenced by decarbonization, digitalization, and evolving supply chains. Despite 6% of post-COVID stimulus efforts targeting greenhouse gas (GHG) emission reductions, rising fuel prices due to the Russia-Ukraine conflict pose challenges, as the maritime sector accounts for 2.8% of global GHG emissions, with over 40% of marine cargo being fossil fuels.
Digital adoption is on the rise, with the smart ports market expected to grow from $1.9 billion to $5.7 billion at a CAGR of 24.3% from 2022 to 2027. The pandemic has highlighted supply chain vulnerabilities, which has prompted the companies to diversify sourcing and rethink logistics.
With that, we look at the 8 Best Marine Shipping Stocks to Invest in.
8 Best Marine Shipping Stocks to Invest in
Our Methodology
For this article, we used stock screeners to identify 25 marine shipping stocks with a market cap of above $50 million. We narrowed our list to 8 stocks most widely held by hedge funds, as of Q2 2024. The 8 best marine shipping stocks to invest in are listed in ascending order of their hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Marine Shipping Stocks to Invest in
8. Golden Ocean Group Limited (NASDAQ:GOGL)
Number of Hedge Fund Holders: 16
Golden Ocean Group Limited (NASDAQ:GOGL) is a Bermuda-based company that offers its services in the dry bulk shipping industry. It owns and operates a fleet that includes Newcastlemax, Capesize, and Panamax vessels. The company’s vessels transport essential commodities such as ores, coal, grains, and fertilizers, which makes it a significant link in the global supply chain.
With a fleet comprising 93 vessels, including one new building, the company has a total capacity of approximately 14.0 million deadweight tonnes (dwt). The fleet includes 84 owned vessels, consisting of 52 Capesize and 32 Panamax ships, as well as eight chartered-in Capesize vessels that come with long-term leases featuring profit-sharing arrangements. It is among the best marine shipping stocks to invest in.
As of now, Golden Ocean (NASDAQ:GOGL) has one Kamsarmax vessel under construction, with contractual commitments of $23 million expected to be settled by the fourth quarter of 2024.
The investment will be funded through the company’s committed debt financing. Demand for large vessels appears particularly strong, mainly due to rising Chinese demand for bauxite and the development of new iron ore export projects in the Atlantic Basin. These trends are likely to provide long-term support for the company’s operations.
On the supply side, the growth of the fleet is moderating, and increasing environmental regulations are anticipated to limit effective fleet capacity. The environment bodes well for the company, as it is well-equipped to generate strong cash flows, thanks to its fleet premium and industry-leading cash breakeven levels.
Golden Ocean (NASDAQ:GOGL) reported a net income of $62.5 million for the second quarter of 2024, with basic earnings per share at $0.31. While this reflects a slight decline from the first quarter’s net income of $65.4 million and earnings per share of $0.33, the company’s strong cash flow generation and solid market positioning remain evident.
7. SFL Corporation Ltd. (NYSE:SFL)
Number of Hedge Fund Holders: 17
SFL Corporation Ltd. (NYSE:SFL) is a prominent maritime and offshore asset-owning and chartering company, engaged in the ownership, operation, and chartering of vessels across a wide range of sectors, including oil transportation, dry bulk shipments, chemical transportation, and drilling rigs.
It has a substantial fleet comprising 81 vessels, including tankers, bulkers, container ships, and energy assets, and has built a robust portfolio supported by long-term charters. The company is one of the best marine stocks to invest in.
The company was founded in 2003 and has evolved from a primarily tanker-owning company into one of the largest ship-owning companies globally. It has expanded its investments across various maritime segments and has maintained a significant charter backlog, which ensures a steady income for the foreseeable future. It was listed on the New York Stock Exchange in 2004, and the company has demonstrated its focus on shareholders by paying dividends every quarter since its listing.
In the second quarter, 17 hedge funds held positions in SFL Corporation (NYSE:SFL) worth $38.023 million.
In 2024, it made notable advancements by securing new long-term charters with major shipping companies, which improves its revenue stability. In July, the company announced five-year time charters for four 8,700 twenty-foot equivalent unit (TEU) container vessels, which will add approximately $240 million to its fixed-rate charter backlog. The vessels have been chartered to A.P. Møller – Mærsk since they were new, with current agreements set to expire in 2025.
Additionally, the company is expanding its fleet with the construction of five 16,800 TEU container vessels, scheduled for delivery in 2028. The vessels come with a minimum of ten-year charters to a leading liner company, potentially adding around $1.2 billion to the charter backlog. There are options to extend these charters and purchase options after ten and twelve years, which include a profit-sharing feature, further expanding the company’s revenue potential.
In April, SFL Corporation Ltd. (NYSE:SFL) announced the acquisition of two LNG dual-fuel chemical carriers for approximately $114 million, built in 2022/2023 and equipped with stainless steel cargo tanks. The vessels will be employed for at least eight years with affiliates of Stolt Tankers, a leader in chemical logistics.
Earlier in March, the company secured three new LR2 product tankers for about $230 million, which also come with long-term charters to a prominent energy and commodities company.
In the second quarter, the company generated a charter hire of $198.8 million, including $4.4 million from profit-sharing arrangements. CEO Ole B. Hjertaker highlighted the company’s successful execution of its growth strategy, reporting an addition of over $2 billion to its charter backlog this year. The total charter backlog now stands at nearly $5 billion, which points to a strong revenue foundation moving forward.
6. Ardmore Shipping Corporation (NYSE:ASC)
Number of Hedge Fund Holders: 20
Ardmore Shipping Corporation (NYSE:ASC) is actively engaged in the transportation of petroleum products and chemicals across the globe, establishing itself as a player in the maritime sector. The company operates a fleet of mid-size product and chemical tankers, delivering essential shipping services through various arrangements, including voyage charters, time charters, and commercial pools.
Noteworthy vessels in its fleet include the Ardmore Seafarer, Ardmore Exporter, Ardmore Explorer, and Ardmore Enterprise. With an average vessel age of 9.8 years, it has one of the more modern fleets in the industry, which is a key advantage in maintaining operational efficiency and regulatory compliance. It occupies a spot on our list of the best marine shipping stocks to invest in.
As of June 30, the company’s operational fleet consisted of 26 vessels, including four chartered-in ships. The fleet is made up of 20 MR tankers, which range from 45,000 to 49,999 deadweight tonnes (dwt), as well as six Eco-Design IMO 2 product and chemical tankers, which range from 25,000 to 37,800 dwt. The combination of vessels positions it to effectively meet diverse shipping demands while building its service capabilities.
Ardmore Shipping (NYSE:ASC) reported a net income of $100.2 million for the first half of 2024. This translates to earnings of $2.41 per basic share and $2.39 per diluted share, significantly up from $66.9 million, or $1.63 per basic share and $1.60 per diluted share, in the same period of 2023. The growth in profitability highlights the company’s ability to capitalize on market opportunities and optimize its operations.
Looking ahead to the third quarter of 2024, it expects that 95% of its revenue days for MR tankers will be utilized in the spot market, with the remaining 5% under time charters. As of July 31, the company had already fixed approximately 45% of its total spot revenue days for the quarter at an average spot time charter equivalent (TCE) rate of about $34,300 per day. This includes Eco-Design MR tankers averaging $33,700 per day and Eco-Mod tankers at $38,600 per day. Such proactive management of charter agreements positions the company to benefit from favorable market conditions while securing revenue stability.
Aristotle Capital Boston, LLC stated the following regarding Ardmore Shipping Corporation (NYSE:ASC) in its Q2 2024 investor letter:
“Ardmore Shipping Corporation (NYSE:ASC), a product and chemical transportation company focused on modern mid-sized vessels, appreciated amid global refinery shifts and geopolitical factors, boosted voyage lengths and demand for product tankers. We maintain a position, as we believe the company continues to operate from a position of strength, driven by recent shareholder-friendly capital allocation decisions, strong operating performance, and a favorable industry supply-demand backdrop.”
5. Genco Shipping & Trading Limited (NYSE:GNK)
Number of Hedge Fund Holders: 21
Genco Shipping & Trading Limited (NYSE:GNK) is known for the global transportation of dry bulk cargoes as it operates a diverse fleet to meet the demands of various industries. It has a focus on transporting important materials like iron ore, grains, coal, and steel products. The company serves a wide range of clients, including trading houses, commodity producers, and government entities. It is 5th on our list of the best marine stocks to invest in.
The company operates a fleet projected to comprise 41 vessels, featuring 15 Capesize, 15 Ultramax, and 11 Supramax carriers. The fleet has a total capacity of approximately 4.3 million deadweight tons. The average age of its vessels is around 11.9 years, striking a balance between seasoned operational experience and opportunities for modernization through targeted upgrades.
Referring to the second quarter, CEO John C. Wobensmith emphasized the successful execution of a fleet renewal initiative aimed at enhancing operational efficiency. The company has been proactive in selling older vessels at favorable prices and reinvesting in newer, more advanced ships. Recent transactions, including the sale of two Capesize vessels, Genco Maximus and Genco Claudius, along with planned sales of Genco Warrior and Genco Hadrian, show this commitment. It helped generate significant cash inflow and will help it in avoiding $5 million in upcoming drydocking expenses, positively impacting overall profitability.
On September 10, Genco Shipping (NYSE:GNK) announced a notable adjustment to its dividend calculation methodology. By removing drydocking capital expenditures from the formula, the company aims to increase the cash available for distribution to shareholders starting in the third quarter of 2024. It has established a voluntary quarterly reserve of $19.5 million under this new approach, which provides flexibility in cash flow management while prioritizing shareholder returns.
In the second quarter, 21 hedge funds had stakes in Genco Shipping (NYSE:GNK), with total positions worth $81.3 million. As of June 30, Renaissance Technologies is the largest shareholder in the company and has a position worth $22.376 million.
4. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Holders: 26
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is a prominent name in the container shipping industry, recognized for its innovative approach and extensive global reach. The company’s operations span over 90 countries and services that touch approximately 300 ports worldwide, which has helped it create a diverse customer base of more than 32,000 clients.
The broad network supports its mission to provide efficient and reliable shipping services on key trade routes, including the Pacific, Latin America, Atlantic, Cross-Suez, and Intra-Asia. It takes its place among our best marine shipping stocks to invest in.
A significant part of the company’s competitive edge is in its agile fleet management and deployment strategy. The company is in the middle of a substantial fleet renewal initiative, featuring a modern lineup of 46 new container ships, of which 28 are powered by liquefied natural gas (LNG).
As of mid-May, ZIM Integrated (NYSE:ZIM) had already received 30 of these vessels, with the remaining 16 scheduled for delivery by the end of 2024. Once this fleet renewal program is completed, over half of its operated capacity will consist of these newbuild ships, with the rest of the portion being LNG-powered.
In the second quarter, the company showed strong performance, evidenced by a nearly 11% year-over-year increase in carried volume. The growth resulted in a remarkable 48% rise in revenue, reaching $1.93 billion.
Furthermore, net income climbed by 46% to $19 million, both figures surpassing analysts’ expectations. CEO Eli Glickman credited the success to a strategic increase in the company’s exposure to the spot market, which allowed it to capitalize on elevated rates that have persisted longer than anticipated.
Glickman is confident about ZIM Integrated’s (NYSE:ZIM) performance in the second half of 2024. He sees improved results driven by ongoing supply pressures from the Red Sea crisis, alongside favorable demand trends.
3. Matson, Inc. (NYSE:MATX)
Number of Hedge Fund Holders: 27
One of the best marine shipping stocks to invest in, Matson, Inc. (NYSE:MATX) is a Hawaii-based company that offers its services in the ocean transportation and logistics sector. The company operates through two main segments, Ocean Transportation and Logistics.
In the Ocean Transportation segment, the company specializes in freight services tailored for domestic markets, including Hawaii, Japan, Alaska, and Guam, as well as various island economies in Micronesia. The company transports a wide range of cargo, ranging from dry goods to refrigerated items and beverages, which ensures that essential supplies reach these regions consistently. The diversity in cargo handling not only stabilizes revenue but also improves its reputation for reliability.
Meanwhile, the Logistics segment adds to the company’s offerings as it includes transportation brokerage, less-than-container load consolidation, and freight forwarding. The segment also provides warehousing, distribution, and supply chain management services, which cater to various customer needs.
The company serves a set of clients, including the U.S. military, retailers, freight forwarders, consumer goods companies, and automobile manufacturers. The extensive service portfolio positions it as a versatile provider in a competitive market.
Matson (NYSE:MATX) was part of 27 hedge funds’ portfolios in the second quarter with a total stake value of $230.763 million. Citadel Investment Group is the most prominent shareholder in the company and has a position worth $6.147 million as of Q2.
During the second quarter, the company repurchased approximately 0.6 million shares, which signals confidence in its future prospects. As of June 30, Matson’s (NYSE:MATX) cash and cash equivalents rose by $34.2 million from the end of 2023, totaling $168.2 million. The increase points to a strong liquidity position, which is essential for ongoing operations and potential investments.
Moreover, it has been actively reducing its total debt, which decreased by $19.9 million in the first half of the year, bringing the total down to $420.7 million, with most of it being long-term debt.
Analyst sentiment also supports the positive outlook for the company. On August 2, Jack Atkins raised the price target on the stock from $155.00 to $160.00 and maintained an Overweight rating.
The London Company stated the following regarding Matson, Inc. (NYSE:MATX) in its Q2 2024 investor letter:
“Matson, Inc. (NYSE:MATX) – MATX ocean freight services are benefiting from rising shipping rates and improving market conditions. Global ocean freight pricing has been driven up by the ongoing disruption in the Red Sea, coupled with ramping peak season demand and healthier trade volumes. MATX’s success since the onset of the pandemic has led to permanent volume additions in the China trade lane, a transformed balance sheet. and significant share count reduction. MATX remains strategically positioned as a US Jones Act shipping operator and its expedited freight service continues to offer an attractive value proposition for its customers.”
2. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Number of Hedge Fund Holders: 27
Star Bulk Carriers Corp. (NASDAQ:SBLK) operates as a prominent player in the global shipping industry and it specializes in the transportation of dry bulk cargoes. This includes both major commodities like iron ore, minerals, and grain, as well as minor bulks such as bauxite, fertilizers, and steel products. The company ranks 2nd among our best marine shipping stocks to invest in.
With an impressive capacity to transport over 70 million metric tons of cargo annually, the company plays an important role in connecting suppliers to markets worldwide. Its subsidiary, Star Bulk (Singapore) Pte. Ltd., supports this service by effectively bridging the gap between the origination and destination of these dry bulk commodities.
Recently, Star Bulk (NASDAQ:SBLK) made an essential move by selling the Capesize vessel m/v Star Triumph, which was the oldest in its fleet, for a gross price of $20 million. After settling associated debts, the net proceeds from this sale amount to approximately $13 million.
Following this transaction, the company’s fleet will consist of 153 owned vessels, with a total carrying capacity of 15 million deadweight tons (dwt). The fleet includes various types of vessels: Newcastlemax, Capesize, Post Panamax, Kamsarmax, Panamax, Ultramax, and Supramax. The fleet ranges in carrying capacities from 53,489 dwt to 209,537 dwt, which allows it to adapt to different shipping needs and market demands.
In April, the company successfully completed its merger with Eagle Bulk Shipping Inc., which further strengthened its market position. The merger has allowed the company to advance its operational scale and capabilities.
As of August 1, the conversion of Eagle’s 5.00% Convertible Senior Notes into Star Bulk common stock has been completed, facilitating a smoother integration process. The company aims to achieve $50 million in cost and revenue synergies from the merger by 2025, which could significantly boost profitability and operational efficiency.
In addition to its growth strategies, Star Bulk (NASDAQ:SBLK) is focused on returning capital to its shareholders. The last declared dividend of $0.70 marks the fourteenth consecutive payment, which is a sign of the company’s focus on shareholder value. Since June 2021, it has distributed over $1.25 billion in dividends.
1. Kirby Corporation (NYSE:KEX)
Number of Hedge Fund Holders: 32
Kirby Corporation (NYSE:KEX) is Texas-based and operates in the U.S. marine transportation sector, particularly through its extensive operations involving tank barges. It transports a wide range of bulk liquid products, including petrochemicals, black oil, refined petroleum products, and agricultural chemicals.
According to our database, 32 hedge funds held stakes in Kirby (NYSE:KEX) in the second quarter, with positions worth $659.739 million. As of June 30, with 887,384 shares of the company, valued at $106,246 million, Encompass Capital Advisors is the largest shareholder of the company. It takes the top position on our list of the best marine shipping stocks to invest in.
The company’s service network covers critical waterways, including the Mississippi River System, the Gulf Intracoastal Waterway, and all three U.S. Coasts. Due to this, it has an advantage in a market where efficient and reliable transport of liquid commodities is essential.
The scale of Kirby’s (NYSE:KEX) operations is noteworthy. According to the company, its inland tank barge fleet alone constitutes around 27% of the U.S. market as it has 1,093 tank barges that collectively have a capacity of 24.2 million barrels, supported by 287 towboats.
Additionally, its coastal fleet, while smaller, adds further capacity with 28 tank barges and 25 tugboats, along with four offshore dry-bulk cargo barges and associated tugboats. The substantial fleet not only allows the company to meet diverse transportation needs but also enables it to capitalize on various market opportunities.
David Grzebinski, the CEO, expressed optimism about the company’s recent performance, attributing strong results in the first half of the year to effective operations and favorable market conditions. The company is projecting significant net cash from operations, estimated between $600 million and $700 million for 2024. The strong cash flow is important as it provides the company with the financial flexibility to invest in its infrastructure and services.
Capital spending is expected to range from $300 million to $330 million, which includes essential investments in maintenance and improvements to both inland and coastal marine equipment. Approximately $200 million to $240 million is earmarked for these maintenance activities, which ensures that Kirby’s (NYSE:KEX) operations remain efficient and competitive.
Furthermore, the allocation of about $90 million for growth initiatives suggests that the company is not just maintaining its current capabilities but is also looking to expand and improve its services across both marine transportation segments.
While we acknowledge the potential of Kirby Corporation (NYSE:KEX) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is promising and trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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