The shipping industry has entered 2025 on choppy waters, contending with geopolitical uncertainties, evolving trade policies, and a surge in technological innovation. From sustainability initiatives to digital transformation, the sector is undergoing a profound shift that presents both challenges and opportunities.
Investors seeking exposure to this sector must focus on companies with strong operational efficiency and competitive advantages to weather economic cycles. In this article, I have highlighted three such stocks, namely, Matson, Inc. (MATX), ZIM Integrated Shipping Services Ltd. (ZIM), and Teekay Corporation Ltd. (TK), that are poised to capitalize on industry tailwinds and deliver long-term gains.
Shipping stocks are inherently cyclical, with companies leveraging substantial capital to expand their fleets. While downturns can strain balance sheets, periods of rising demand often lead to substantial market gains. Although concerns over a global economic slowdown have impacted valuations, the sector remains on a steady upward trajectory.
The global shipping and logistics market is projected to hit $8.1 trillion by 2033, exhibiting a CAGR of 4%. Meanwhile, the cargo shipping segment is expected to grow from $17.4 billion in 2025 to $24.18 billion by 2033 at a CAGR of 4.2%. Given the cost and volume constraints of road and air transport, maritime shipping remains the most viable solution for bulk freight, facilitating approximately 80% of global trade, according to the United Nations Conference on Trade and Development (UNCTAD).
Additionally, the industry is embracing digital transformation, integrating blockchain, IoT, and AI to enhance operational efficiency. UNCTAD reports that adopting digital freight solutions has cut shipping lead times by 10%, significantly improving cost structures and supply chain transparency.
Given these favorable industry trends, let’s look at the fundamentals of Shipping stocks, beginning with the third choice.
Stock #3: Teekay Corporation Ltd. (TK)
Based 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. It also provides ship-to-ship support services, tanker commercial management operation services, and operational and maintenance marine services.
In terms of the trailing-12-month EBIT margin, TK’s 27.27% is 45.8% higher than the 18.71% industry average. Likewise, its 18.55% trailing-12-month ROCE is 65.4% higher than the 11.22% industry average. Also, TK’s trailing-12-month levered FCF margin of 22.96% compares favorably to the sector’s average of 6.81%.
For the fourth quarter of 2024, which ended on December 31, TK’s revenues amounted to $256.57 million, while the income from operations stood at $70.33 million. In addition, the company reported an adjusted net income of $16.64 million, while its non-GAAP earnings per share for the quarter came in at $0.19. As of December 31, 2024, its cash and cash equivalents increased by 51% year-over-year to $173.44 million.
However, the stock has lost 2.9% over the past month to close the last trading session at $6.56.
TK’s POWR Ratings reflect this solid outlook. The stock has an overall rating of B, which equates 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.
TK has an A grade for Value and a B for Quality. Among 34 stocks in the B-rated Shipping industry, it is ranked #11. Click here to see the additional ratings for TK (Growth, Momentum, Stability, and Sentiment).
Stock #2: ZIM Integrated Shipping Services Ltd. (ZIM)
ZIM provides container shipping and related services in Israel and internationally. It offers door-to-door and port-to-port transportation services for various customers, including end-users, consolidators, and freight forwarders.
Last year, in November, ZIM announced an accelerated global rollout of smart containers, enhancing visibility and transparency with Hoopo’s advanced hoopoSense Solar trackers. Hoopo’s all-in-one device simplifies deployment and improves tracking accuracy, offering ZIM and its customers a reliable and cost-effective solution.
In terms of the trailing-12-month EBITDA margin, ZIM’s 20.41% is 41.6% higher than the 14.42% industry average. In addition, the stock’s trailing-12-month net income margin and ROCE of 19.26% and 44.28% are considerably higher than their respective industry average of 6.35% and 13.03%.
During 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. Its adjusted EBITDA improved considerably from the year-ago value to $1.53 billion.
The company’s 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. Also, its free cash flow amounted to $1.45 billion, registering a triple-digit growth over the prior-year quarter.
Analysts expect ZIM’s revenue for the fiscal fourth quarter (ended December 2024) to increase 67.7% year-over-year to $2.02 billion, and its EPS is estimated to be $3.49. Over the past year, the stock has surged 62.4%, closing the last trading session at $20.36.
It’s no surprise that ZIM has an overall rating of B, equating to a Buy in our POWR Ratings system. It has an A grade for Value and Quality and a B for Growth. Within the same B-rated industry, it is ranked #6.
Beyond what is stated above, we’ve also rated ZIM for Momentum, Stability, and Sentiment. Get all ZIM ratings here.
Stock #1: Matson, Inc. (MATX)
MATX provides ocean transportation and logistics services. It operates through two segments: Ocean Transportation and Logistics.
On January 23, 2025, buoyed by its strong financial performance, the company declared a quarterly dividend of $0.34 per common share, payable to its shareholders on March 6, 2025. MATX pays a $1.36 per share dividend annually, which translates to a 0.97% yield on the current share price. Its four-year dividend yield is 1.35%.
The company’s dividend payouts have grown at CAGRs of 5.9% and 9% over the past three and five years, respectively. Moreover, MATX has a record of 11 years of consecutive dividend growth.
MATX’s trailing-12-month EBIT margin of 16.14% is 56.8% higher than the industry average of 10.30%. Its trailing-12-month net income margin stands at 13.92%, 119.4% higher than the industry average of 6.35%. Also, the stock’s trailing 12-month ROTC of 11.19% outperforms the industry average of 6.96% by 60.9%.
For the fiscal 2024 fourth quarter that ended December 31, MATX’s total operating revenues increased 12.8% year-over-year to $890.30 million. Its operating income grew 95.9% from the prior year’s quarter to $147.50 million.
Additionally, the company’s net income and EPS amounted to $128 million and $3.80, reflecting an increase of 105.1% and 113.5% year-over-year, respectively. Also, its EBITDA for the quarter came in at $195.20 million, up 63.5% year-over-year.
Street expects MATX’s revenue for the first quarter (ending March 2025) to increase 13.3% year-over-year to $818.07 million. Meanwhile, its EPS for the same period is expected to grow 108.9% year-over-year to $2.17. Moreover, the company topped the consensus EPS estimates in all of the trailing four quarters.
Shares of MATX have gained 26.9% over the past year to close the last trading session at $143.76.
MATX’s strong 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.
It also has a B grade for Growth, Value, and Quality. Out of 34 stocks in the Shipping industry, MATX is ranked #4. Click here to see the other ratings for MATX for Momentum, Stability, and Sentiment.
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MATX shares were trading at $143.50 per share on Friday morning, up $2.71 (+1.92%). Year-to-date, MATX has gained 6.69%, versus a 0.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
3 Shipping Stocks That Could Sail Higher in 2025 StockNews.com
