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Here's Why You Should Add ZIM Stock to Your Portfolio Now
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ZIM Integrated Shipping Services (ZIM - Free Report) has been benefiting from the Red Sea crisis-induced high freight rates. The company’s shareholder-friendly initiatives also bode well.
Let us delve deeper to unearth the factors working in favor of this Zacks Rank #1 (Strong Buy) stock.
ZIM’s Northward Earnings Estimates: In the past 60 days, the Zacks Consensus Estimate for current and next-year earnings has been revised upward by 35.7% and 126.7%, respectively. Such favorable estimate revisions indicate brokers’ confidence in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Impressive Price Performance of ZIM: Shares of ZIM have surged 103.6% year to date compared with its industry’s growth of 13.4%.
YTD Price Comparison
Image Source: Zacks Investment Research
Other Tailwinds of ZIM: Heightened freight rates due to the Red Sea Shipping crisis have been turning out to be a huge positive for ZIM. The crisis caused by the attacks by Yemen’s Houthi militants on vessels in the Red Sea has prompted many shipping companies, including ZIM, to hit a pause as far as transit through this route is concerned. The companies are using the longer and costlier route around the Cape of Good Hope in South Africa rather than going through the Suez Canal.
Reduced container availability due to the Red Sea tensions has resulted in higher freight costs. On account of the disruptions, ZIM’s profits, revenues and carried volumes for the first nine months of 2024 have surged. The Israeli shipping company reported a 58.2% year-over-year uptick in revenues in the first nine months of 2024 to $6.26 billion. EBIT on an adjusted basis in the same period turned to a profit of $1.89 billion against the loss of $373 million in the first nine months of 2023. Carried volumes increased 10.9% in the first nine months, with average freight rates rising 53% year over year in the same timeframe.
ZIM’s focus on niche markets and high-margin trade routes helps it avoid crowded, low-margin segments, thereby maintaining strong pricing power. This, too, aids profitability. The shipping company’s operational efficiency has been aided by investments in digitalization and innovative technologies. This not only boosts ZIM’s bottom line but also allows it to take advantage of emerging trends, such as the increased demand for eco-friendly shipping solutions.
ZIM returns 30% of the company’s quarterly net income to its shareholders. Sticking to this policy, in the third quarter of 2024, ZIM’s board declared a regular dividend of approximately $340 million or $2.81 per ordinary share. The company’s quarterly dividend tripled quarter over quarter. Additionally, the board declared a special dividend of approximately $100 million, translating into 84 cents per share.
WAB has an expected earnings growth rate of 2% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 9.46%. Shares of WAB have risen 66.6% in the past year.
SkyWest presently sports a Zacks Rank #1. SKYW has an expected earnings growth rate of 4.07% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 79.12%. Shares of SKYW have climbed 130.1% in the past year.
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Here's Why You Should Add ZIM Stock to Your Portfolio Now
ZIM Integrated Shipping Services (ZIM - Free Report) has been benefiting from the Red Sea crisis-induced high freight rates. The company’s shareholder-friendly initiatives also bode well.
Let us delve deeper to unearth the factors working in favor of this Zacks Rank #1 (Strong Buy) stock.
ZIM’s Northward Earnings Estimates: In the past 60 days, the Zacks Consensus Estimate for current and next-year earnings has been revised upward by 35.7% and 126.7%, respectively. Such favorable estimate revisions indicate brokers’ confidence in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Impressive Price Performance of ZIM: Shares of ZIM have surged 103.6% year to date compared with its industry’s growth of 13.4%.
YTD Price Comparison
Other Tailwinds of ZIM: Heightened freight rates due to the Red Sea Shipping crisis have been turning out to be a huge positive for ZIM. The crisis caused by the attacks by Yemen’s Houthi militants on vessels in the Red Sea has prompted many shipping companies, including ZIM, to hit a pause as far as transit through this route is concerned. The companies are using the longer and costlier route around the Cape of Good Hope in South Africa rather than going through the Suez Canal.
Reduced container availability due to the Red Sea tensions has resulted in higher freight costs. On account of the disruptions, ZIM’s profits, revenues and carried volumes for the first nine months of 2024 have surged. The Israeli shipping company reported a 58.2% year-over-year uptick in revenues in the first nine months of 2024 to $6.26 billion. EBIT on an adjusted basis in the same period turned to a profit of $1.89 billion against the loss of $373 million in the first nine months of 2023. Carried volumes increased 10.9% in the first nine months, with average freight rates rising 53% year over year in the same timeframe.
ZIM’s focus on niche markets and high-margin trade routes helps it avoid crowded, low-margin segments, thereby maintaining strong pricing power. This, too, aids profitability. The shipping company’s operational efficiency has been aided by investments in digitalization and innovative technologies. This not only boosts ZIM’s bottom line but also allows it to take advantage of emerging trends, such as the increased demand for eco-friendly shipping solutions.
ZIM returns 30% of the company’s quarterly net income to its shareholders. Sticking to this policy, in the third quarter of 2024, ZIM’s board declared a regular dividend of approximately $340 million or $2.81 per ordinary share. The company’s quarterly dividend tripled quarter over quarter. Additionally, the board declared a special dividend of approximately $100 million, translating into 84 cents per share.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector may consider Westinghouse Air Brake Technologies (WAB - Free Report) and SkyWest (SKYW - Free Report) .
Westinghouse Air Brake Technologies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
WAB has an expected earnings growth rate of 2% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 9.46%. Shares of WAB have risen 66.6% in the past year.
SkyWest presently sports a Zacks Rank #1. SKYW has an expected earnings growth rate of 4.07% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 79.12%. Shares of SKYW have climbed 130.1% in the past year.