- ZIM Integrated Shipping Services (ZIM) stock is an undervalued gem that offers outstanding yield.
- Moreover, the company’s financials are airtight.
- Investors should start a position in ZIM stock while it’s valuation is still low.
ZIM Integrated Shipping Services (NYSE:ZIM) is headquartered in Israel and provides container shipping services. There are many reasons for value-conscious and income-focused investors to own ZIM stock now.
The company has actually been around since 1945. However, ZIM Integrated Shipping Services became a container-shipping pioneer in the early 1970s.
It’s not difficult to see why the company is relevant in 2022, a year in which supply-chain bottlenecks have thrust the shipping industry into the spotlight. ZIM operates a fleet of around 100 vessels across five geographic trade zones, so it’s a truly multi-national business.
Some of the numbers we’re about to dig up might surprise you. These should be positive surprises, though — and in the end, you might even be persuaded to start a position in ZIM Integrated Shipping Services.
| ZIM | ZIM Integrated Shipping Services | $58.97 |
What’s Happening with ZIM Stock?
So, here’s the first surprising number. Believe it or not, ZIM stock offers a forward annual dividend yield of 34.87%.
Now, that’s what you would call a hefty yield. Some folks might even say it’s too much. Can the company afford to pay a 34.87% dividend?
We’ll explore ZIM Integrated Shipping Services’ financial in a moment, and hopefully you’ll be convinced that the company is in a strong enough financial position to pay those dividend distributions.
Income-focused investors have to admit, it’s tempting to buy and hold ZIM stock just for the sizable yield. Yet, there are other reasons to own the stock.
Are you ready for another shocking number? Believe it or not, ZIM’s trailing 12-month price-to-earnings ratio is 1.41. That’s a rock-bottom valuation, and it suggests that the share price is extremely low when we take the company’s earnings into consideration.
Value investors should like that number, and here’s something else they’ll appreciate. ZIM stock just recently pulled back from $91.23 to the $50s. Thus, value hunters can grab some shares at an attractive price point.
Financially Firm
Already, you’ve been given enough information to get you interested in ZIM. Still, it’s understandable if you’re worried about the dividend being too large.
Only a business that’s financially firm can continue to pay out such large dividend distributions. So, let’s dig into the company’s financials.
Here’s yet another astonishing number for you. In the fourth quarter of 2021, ZIM Integrated Shipping Services’ net income totaled $1.71 billion, marking a year-over-year increase of 366%.
During that same quarter, the company posted revenue of $3.47 billion, signifying a 155% year-over-year increase. In other words, ZIM had outstanding bottom-line and top-line quarterly results.
Were those results just a fluke, though? Let’s widen our scope to full-year 2021 and see what we come up with.
In 2021, ZIM reported net income of $4.65 billion, up a whopping 787% year-over-year. As for 2021’s revenue, the company generated $10.73 billion, showing year-over-year growth of 169%.
It’s just one jaw-dropping number after another. Truly, ZIM Integrated Shipping Services’ President and CEO Eli Glickman earned the right to engage in some boasting about his company’s performance:
With another quarter of exceptional financial performance, we generated our highest ever full year of revenues, adjusted EBITDA, net profit and operating cash flows, while once again delivering industry-leading margins. We also ended the year with a net positive cash position and strong financial flexibility.
What You Can Do Now
As supply-chain concerns mount, this is a great time to consider a long position in an in-demand company like ZIM Integrated Shipping Services.
Now you’ve seen the company’s financial stats, which are amazing. It’s clear that ZIM should be able to maintain its dividend.
Plus, ZIM stock is trading at a low valuation. Feel free, then, to pick up a few shares — and enjoy collecting those prodigious dividend distributions.
On the date of publication, David Moadel 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.