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Global shipping doesn’t dominate the headlines like Big Tech or AI, but it is a mission-critical link in the global commerce chain. This business sector has quietly been building fortunes for investors for centuries, and that trend continues today. That helps explain why Deutsche Bank analysts are enamored with a global shipping stock paying a double-digit dividend.
Global shipping, like real estate, is an industry that has numerous different sectors. Although the most recognizable global shipping sector may be the flow of finished goods from China to Europe and the Americas, transporting raw materials like iron ore and aluminum is also very lucrative. This is known as the “dry bulk” sector, and it’s paying investors big dividends because without it, global manufacturing would come to a halt.
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Deutsche Bank analysts have noticed and believe the dry-bulk sector is rising. Their data shows that shipping rates for the Capesize ships that handle dry bulk products have gone from $9,000/day to $28,000/day in the last twelve months. That’s an increase of over 300%, which translates into serious profits for investors in dry bulk shipping companies.
One of those companies is Star Bulk Carriers (Nasdaq: SBLK). This is a rapidly growing global shipping company that handles a full range of dry bulk products, which are broken down into two sections:
· Major Bulk-(e.g. coal, grains, ore)
· Minor Bulk-(e.g. sugar, cement)
Star Bulk Carriers was already a global leader in the field when it acquired competitor Eagle Bulk in the last quarter of 2023. This $2.1 billion transaction made Star Bulk Carriers the largest bulk shipping company on the Nasdaq. It also allowed Star Bulk to expand its fleet, which now includes 161 ships of various sizes.
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Star Bulk Carriers has a market cap of $2.46 billion, and it just reported blockbuster Q2 2024 earnings of $352.8 million. That was nearly a 50% improvement over the previous year, and the extra profits are leading to some impressive dividends. Star Bulk Carriers is paying a strong 12.8% dividend on its $21.86 share price. That means Star Bulk investors are set to earn $2.79/share for the upcoming quarter.
That’s a great return by any measure, and Star Bulk’s position as one of the largest operators in its sector indicates this company is primed for continued earnings. There is, of course, never a guarantee of future dividends, but it’s worth noting that Star Bulk Carriers has paid over $1.2 billion in investor dividends since 2021.
As always, remember that every business sector has risks, and global shipping is no different. Elevated fuel costs or a global economic slowdown could impact profits in the case of Star Bulk Carriers. With those caveats, Star Bulk Carriers has the potential to be a good dividend stock, and the fact that it’s available at an affordable share price doesn’t hurt either.
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This article Deutsche Bank Loves This Stock Paying A Near 13% Dividend originally appeared on Benzinga.com
