In this article, we discuss 11 best shipping stocks that pay dividends. You can skip our detailed analysis of the shipping and transportation industry, and go directly to read 5 Best Shipping Stocks That Pay Dividends.
In today's interconnected global economy, the movement of goods across the world holds immense significance. The World Economic Forum has highlighted that approximately 90% of the goods circulating across the globe are transported through maritime channels. This statistic unveils the pivotal role played by sea-based transportation in sustaining international trade and supply chains.
The COVID-19 pandemic brought attention to shipping stocks, usually not in the spotlight. Investors saw firsthand how vital marine shipping is for the global economy during this time. This significant surge during the pandemic was because people turned to online shopping platforms. This increased demand for high-value items like home appliances and electronics. As a result, logistics companies, responsible for transporting goods from manufacturers to stores and residences, saw a rise in their revenues due to this heightened demand. From around mid-March to October 2020, amid the peak of global pandemic restrictions, the largest shipping firms worldwide collectively increased their market value by more than $23 billion, as reported by Forbes.
That said, regular supply chains faced major disruptions during the pandemic, causing many of the world's large cargo ships and containers to be in the wrong places when a sudden surge in demand occurred. With people confined to their homes and unable to spend on experiences, they turned to purchasing goods instead. This unexpected shift overwhelmed the shipping industry, as it wasn't prepared for such a rapid increase in shipping needs. However, even amid these disruptions, shipping stocks continued to play a vital role in the global economy. In 2021, the total value of global trade reached an astonishing $28.5 trillion. A substantial portion of this immense cargo movement was facilitated by publicly traded shipping companies, underlining their significant contribution to global trade and commerce despite the challenges posed by the pandemic. In addition to this, between 2021 and 2022, the largest carriers made a combined net income of $364 billion, a stark change after a decade of minimal profits according to data from industry expert John McCown.
In a recent development, shipping stocks experienced a global increase in value. This rise was fueled by anticipated disruptions in Red Sea routes due to militant attacks, which were expected to lead to higher charges for transporting goods via ocean containers. These potential price hikes offered a glimmer of relief for investors who had witnessed a year of lackluster performance in the sector. Following the pandemic, freight rates declined as the initial surge in demand for tangible products subsided, and the logistical challenges related to Covid gradually improved. Compounding these challenges was the adverse impact of elevated global interest rates, further adding to the sector's woes. The S&P Transportation Select Industry Index, which tracks the performance of some of the best shipping stocks, gained 25.7% as of the close of December 21.
Shipping stocks are favored by investors for several reasons, one being their consistent payment of dividends. Dividend stocks are a dependable source of consistent earnings for both investors and the companies issuing them. Among various types of stocks, those from companies that consistently increase their dividends stand out prominently. Some of the best dividend stocks that have grabbed investors’ attention include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP). In this article, we will take a look at some of the best shipping stocks that pay dividends.
11 Best Shipping Stocks That Pay Dividends
An aerial view of an expansive shipping dock, its bustle of activity serving as a visual representation of the company's business.
Our Methodology:
For this list, we picked the top 11 shipping stocks that pay dividends based on their popularity among elite hedge funds in the third quarter of 2023. These stocks belong to companies involved in maritime transportation, which includes container ships, tankers, bulk carriers, and other vessels facilitating global trade. We gauged hedge fund sentiment for these stocks using Insider Monkey’s database of 910 hedge funds, as of Q3 2023.
Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points since 2014 (see the details here). That’s why we encourage our readers to delve into the specifics and nuances of our research.
Navios Maritime Partners L.P. (NYSE:NMM) operates as an international shipping company, primarily focused on the transportation and carriage of various commodities and goods across the globe. On October 26, the company declared a quarterly dividend of $0.05 per share, which was in line with its previous dividend. With a dividend yield of 0.88%, as of December 22, NMM is one of the best shipping stocks on our list.
In addition to popular dividend stocks like The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP), investors can also consider NMM for a diversified dividend portfolio.
At the end of Q3 2023, 3 hedge funds in Insider Monkey's database reported having stakes in Navios Maritime Partners L.P. (NYSE:NMM), the same as in the preceding quarter. The consolidated value of these stakes is over $6.4 million. Among these hedge funds, Gratia Capital was the company's leading stakeholder in Q3.
Euroseas Ltd. (NASDAQ:ESEA) is a shipping company, based in Greece. The company is primarily involved in the transportation of goods across the world's oceans. It currently offers a quarterly dividend of $0.50 per share and has a dividend yield of 5.77%, as of December 22. The company reinstated its dividend policy last year and has paid regular dividends since then. It is among the best shipping stocks on our list that pay dividends to shareholders.
As of the close of Q3 2023, 3 hedge funds tracked by Insider Monkey owned stakes in Euroseas Ltd. (NASDAQ:ESEA), up from 2 in the previous quarter. The overall value of these stakes is nearly $1 million.
Diana Shipping Inc. (NYSE:DSX) operates as a global shipping company primarily engaged in the transportation of dry bulk cargoes. Diana Shipping's fleet is utilized in international trade, serving major industries and clients worldwide. It is one of the best shipping stocks on our list as it has been growing its dividends regularly since the inception of its dividend policy in 2021. The company offers a quarterly dividend of $0.15 per share and has an attractive dividend yield of 19.02%, as recorded on December 22.
At the end of September 2023, 7 hedge funds in Insider Monkey's database owned investments in Diana Shipping Inc. (NYSE:DSX), which remained the same as in the previous quarter. These stakes have a total value of more than $18.7 million. With over 5 million shares, Hosking Partners was the company's leading stakeholder in Q3.
SFL Corporation Ltd. (NYSE:SFL) operates as a major player in the marine industry, specializing in owning and chartering out vessels across various segments. The company's current quarterly dividend stands at $0.25 per share for a dividend yield of 8.55%, as of December 22. It is one of the best shipping stocks on our list as the company has paid dividends to shareholders every quarter since 2004.
Insider Monkey's database of Q3 2023 showed that 8 hedge funds owned stakes in SFL Corporation Ltd. (NYSE:SFL), compared with 10 in the preceding quarter. The total value of these stakes is more than $2.7 million.
Costamare Inc. (NYSE:CMRE) is an Athens-based shipping company that primarily operates in the container shipping industry, owning and chartering vessels to major container shipping companies globally. In the third quarter of 2023, the company reported revenue of $397.2 million, which showed a 37.2% growth from the same period last year. It returned $9.5 million to shareholders through dividends during the quarter, which makes CMRE one of the best shipping stocks on our list.
Costamare Inc. (NYSE:CMRE) currently pays a quarterly dividend of $0.115 per share and has a dividend yield of 4.34%, as of December 22. It has been paying regular dividends to shareholders since 2011.
At the end of Q3 2023, 10 hedge funds in Insider Monkey's database reported having stakes in Costamare Inc. (NYSE:CMRE), down slightly from 11 in the previous quarter. These stakes are roughly valued at $10 million in total.
Danaos Corporation (NYSE:DAC) is a prominent global owner and operator of container ships, specializing in providing maritime transportation services. The company's primary focus is owning and managing a fleet of container vessels used in international trade. On November 14, the company announced a quarterly dividend of $0.80 per share, having raised it by 6.7%. With a dividend yield of 4.32% as of December 22, DAC is one of the best shipping stocks on our list.
Danaos Corporation (NYSE:DAC) can be added to dividend portfolios in addition to some of the best dividend stocks, such as The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
As of the close of Q3 2023, 10 hedge funds owned stakes in Danaos Corporation (NYSE:DAC), compared with 11 in the preceding quarter, according to Insider Monkey's database. The consolidated value of these stakes is more than $55.6 million.
