Moving Goods Globally is Big Business
There are many ships on the seas. Of course, most people are familiar with Carnival Cruises or similar recreational vacation luxury ships. But most don’t think about the ships that bring the vast majority of the things we buy from Walmart, Amazon, Target, or other retailers to our shores. Now that the world economy is recovering, shipping is coming to life again. Three possible investments in this sector are Costamare, Matson, and Global Ship Lease. I have owned shares of GSL, and it is smaller in market cap than CMRE and MATX. However, MATX is now on my radar. (Or should I say, from a nautical perspective, sonar?) This week’s Barron’s raised my interest when I saw the following dividend boost table. I will look at buying shares before the Ex-Dividend date.
Seeking Alpha Evaluation of all three.
All of the ratings on Seeking Alpha for all three are either bullish or very bullish. But these are not equal in many respects. For one, the ten-year return of MATX is 203.92%, while the other two have awful ten-year returns. GSL pays no dividend, and CMRE has the best yield of the three: 3.90%. MATX, however, is my preference with a yield of 1.88%. Why? Because MATX has a better 5-year dividend growth rate and eight years of consecutive dividend payments. CMRE has neither.
Do Earnings Support the Dividends?
MATX once again beats CMRE and GSL in revenue growth (YOY), EBIT 3-year growth CAGR, Return on Equity, and Return on Assets. MATX has the highest P/E of the three, but that is because investors know it is a better long-term investment. In fact, MATX has been in business since 1882. CMRE originated in 1974, and GSL was first listed on the NYSE in 2008.
Matson Dividend Announcement and Share Repurchase Program
Matson (NYSE:MATX) declares $0.30/share quarterly dividend, 30.4% increase from prior dividend of $0.23. Forward yield 1.88% that is payable Sept. 2; for shareholders of record Aug. 5; ex-div Aug. 4. In addition, the board also approved a share repurchase program totaling 3.0M shares, or ~7%of outstanding common shares. The buyback authorization represents ~$190 million of potential repurchases, as of June 24, 2021.
CMRE Costamare Inc. Company Profile
Costamare Inc. owns and charters containerships to liner companies worldwide. As of June 14, 2021, it had a fleet of 81 containerships with a total capacity of approximately 581,000 twenty foot equivalent units and 16 dry bulk vessels with a total capacity of approximately 932,000 DWT. The company was founded in 1974 and is based in Monaco.
MATX – Matson, Inc. Company Profile
Matson, Inc., together with its subsidiaries, provides ocean transportation and logistics services. The company’s Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, as well as to other island economies in Micronesia. It primarily transports dry containers of mixed commodities, refrigerated commodities, packaged foods and beverages, building materials, automobiles, and household goods; livestock; seafood; general sustenance cargo; and garments, footwear, e-commerce, and other retail merchandise. This segment also operates an expedited service from China to Long Beach, California, and various islands in the South Pacific, as well as Okinawa, Japan; and provides container stevedoring, refrigerated cargo services, inland transportation, container equipment maintenance, and other terminal services to ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui, and Kauai, as well as in the Alaska locations of Anchorage, Kodiak, and Dutch Harbor. In addition, the company offers vessel management and container transshipment services. Its Logistics segment provides multimodal transportation brokerage services, including domestic and international rail intermodal, long-haul and regional highway trucking, specialized hauling, flat-bed and project, less-than-truckload, and expedited freight services; less-than-container load consolidation and freight forwarding services; warehousing and distribution services; supply chain management services, and non-vessel operating common carrier (NVOCC) freight forwarding services. The company serves the U.S. military, freight forwarders, retailers, consumer goods, automobile manufacturers, and other customers. The company was formerly known as Alexander & Baldwin Holdings, Inc. and changed its name to Matson, Inc. in June 2012. The company was founded in 1882 and is headquartered in Honolulu, Hawaii.
GSL – Global Ship Lease, Inc. Company Profile
Global Ship Lease, Inc. owns and charters containerships of various sizes under fixed-rate charters to container shipping companies. As of March 10, 2021, it owned 43 mid-sized and smaller containerships with an aggregate capacity of 245,280 twenty-foot equivalent units. The company is based in London, the United Kingdom.