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ZIM vs. SBLK: Which Shipping Company is a Stronger Play Now?

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ZIM Integrated Shipping (ZIM - Free Report) and Star Bulk Carriers (SBLK - Free Report) are two well-known names in the Zacks Transportation - Shipping industry. While ZIM is based in Israel, SBLK is headquartered in Greece. ZIM is a leading container liner shipping company with a presence in more than 100 countries. The company serves approximately 33,000 customers in more than 330 ports worldwide. Star Bulk provides seaborne transportation solutions globally in the dry bulk sector. 

Given this backdrop, let’s take a closer look at which shipping company currently holds the edge, and more importantly, which might be the smarter investment now.

The Case for ZIM Stock

ZIM's asset-light model, which means that the focus is more on leasing rather than owning vessels. 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 is being aided by investments in digitalization and innovative technologies.

ZIM’s shareholder-friendly approach throws light on its financial prosperity. The shipping company’s high dividend yield is a huge positive for income-seeking investors. This highlights confidence in its cash flow and prospects. In the December quarter, ZIM’s board declared a regular dividend of approximately $382 million or $3.17 per ordinary share. Together with the dividends shelled out in 2024. In the first quarter of 2025, ZIM’s board of directors declared a regular cash dividend of approximately $89 million, or 74 cents per share, reflecting approximately 30% of the quarter’s net income. The dividend will be paid on June 9, 2025, to shareholders of record as of June 2, 2025.

In its recently released first-quarter 2025 results, ZIM continued its streak of beating earnings expectations, showing resilience despite tough conditions. 

ZIM Price, Consensus and EPS Surprise

The ongoing trade tension does not bode well for ZIM, as the company has significant exposure to both China and the United States. The shipping industry, of which ZIM is an integral part, is being hit by the ongoing trade tensions globally. Agreed that tariff woes are showing signs of easing, but in the absence of long-term trade deals, the scenario continues to be uncertain. The uncertainty is the primary reason behind the southward movement of ZIM’s earnings estimates.

Earnings Estimates for ZIM

Zacks Investment ResearchImage Source: Zacks Investment Research

The Case for SBLK Stock

Star Bulk, which has steadily grown to become one of the largest dry bulk shipping companies across the globe, is being well served by its focus on improving operational efficiency and commitment to promoting environmental sustainability. 

The company’s continued fleet expansion (including cargo fleet) initiatives are also praiseworthy. SBLK’s investments in fleet modernization to promote efficiency and increase environmental compliance are commendable. 

The signs of easing U.S.-China trade relations bode well for the dry bulk market, which, in turn, is a positive development for Star Bulk. Strong economic growth in China is likely to boost cargo demand significantly. Impressive economic growth is likely to lift demand for iron ore, coal, and other dry bulk commodities. 

SBLK’s shareholder-friendly approach is also praiseworthy, highlighting its financial bliss. In March, while releasing its first-quarter 2025 results, SBLK’s board declared a dividend of 5 cents per share. This was the shipping company’s 17th consecutive quarter of capital returns. The company is also active on the buyback front.

Through strategic partnerships and operational excellence, the company is well-positioned to meet the evolving demands of global trade. Impressive performance of the capesize market, despite the uncertainties, is a positive development for SBLK.

However, unlike ZIM, SBLK does not have an impressive earnings surprise history, having missed the Zacks Consensus Estimate for earnings twice in the last four quarters (matching one and beating the mark in the other quarter).

SBLK Price, Consensus and EPS Surprise

Earnings Estimates for SBLK

Zacks Investment ResearchImage Source: Zacks Investment Research

Conclusion

The shipping industry is responsible for transporting goods involved in world trade. The slowdown in trade may disrupt trade routes, bringing down goods transportation, in turn hurting the industry players. This trade war is expected to result in increased volatility and uncertainty going forward. Consequently, tariff-related concerns are present for both ZIM and SBLK. 

However, ZIM has an advantage, courtesy of its business model, by virtue of which it can shift capacity to more profitable routes if trade lanes are hit by tariffs. SBLK is likely to be hit more severely if trade tensions do not die down, due to lower dry bulk activity. Unless resolved, SBLK faces significant risks from ongoing trade conflicts, particularly with China, which may lead to permanently lower import demand for iron ore and coal.

Moreover, with spot rates and contracted rates remaining elevated, ZIM is likely to perform well in 2025 as well despite the tariff-induced uncertainties. Given its better prospects driven by its business model to withstand uncertainties, ZIM seems a better pick than SBLK now. 

While ZIM carries a Zacks Rank #3 (Hold), SBLK has a Zacks Rank #4 (Sell) at present.  

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


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