An investment in ZIM Integrated Shipping (NYSE:ZIM) stock makes a lot of sense currently. We’re all aware that supply chain bottlenecks are contributing to rising prices and an overheated economy. Savvy investors are seeking ways to capitalize on those supply chain issues and ZIM shares make a lot of sense.
The fact is that Zim Integrated Shipping grew very quickly in 2021. The volume of goods the company transported increased by 22.5%, reaching 3.481 million TEUs, an abbreviation for twenty-foot cargo container units. That led to an earnings before interest, taxes, depreciation, and amortization (EBITDA) figure that reached $6.597 billion throughout 2021.
However, freight rates more than doubled during the year due to the snags in the supply chain. That should logically cause investors to worry whether 2022 will be as strong a year. Well, based on the company’s guidance that it recently gave when it released earnings, the answer is “yes.”
That’s because the company expects its EBITDA to reach between $7.1 to $7.5 billion this year. Again, that’s a marked improvement over the $6.597 billion EBITDA the company reported in 2021.
And there are at least two other reasons to consider investing in ZIM stock. One is fundamental. The other is rooted in morality. The fundamental reason is that the company provides a massive dividend declared at $17 per share. The company undertook its IPO in January of 2021. Since then it has declared dividends of $2.6 billion which equates to $21.50 per share.
The other reason to consider it is that ZIM Integrated Shipping recently announced that it will not be charging demurrage fees on cargo at its Odessa terminal between Feb. 24 and May 1. Demurrage fees are those which are applied to containers that are left at port for longer than their allotted time. That could lead to investors looking for strong governance and supply chain stocks to put their capital into ZIM Integrated Shipping.
If that doesn’t drive interest, the firm’s strong guidance certainly will.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
