Zim Integrated Shipping Services Ltd. (ZIM) is an Israeli international cargo shipping company that has been operating since 1945. It is one of the top 20 global carriers, with its headquarters located in Haifa, Israel. The company has been publicly held and traded on the New York Stock Exchange since 2021.
As of March 15, 2023, ZIM has a market capitalization of $2.60 billion and an enterprise value of $4.12 billion. Its trailing P/E ratio is 0.44 and it has a PEG ratio of N/A. Its price-to-sales ratio is 0.19, and its price-to-book ratio is 0.45. ZIM’s enterprise value to revenue ratio is 0.30, and its enterprise value to EBITDA ratio is 0.46.
ZIM has an average volume of 4.39 million shares traded in the past three months, with 120.18 million shares outstanding and a float of 93.73 million shares. As of February 27, 2023, 22.01% of shares were held by insiders and 33.63% were held by institutions. The company’s shares had been shorted by 18.58 million as of February 27, 2023, with a short ratio of 3.92 and a short percentage of float of 21.19%. ZIM’s dividend yield is 81.26%, with a forward annual dividend rate of $16.95.
In terms of profitability, ZIM has a profit margin of 36.77% and an operating margin of 48.85%. Its return on assets is 35.73% and its return on equity is 88.21%. The company had revenue of $12.56 billion in the trailing twelve months, with a revenue per share of $104.67. Its quarterly revenue growth (yoy) is -36.90% and its quarterly earnings growth (yoy) is -75.70%. Its gross profit is $7.8 billion, and its EBITDA is $7.53 billion. ZIM’s net income available to common shareholders in the trailing twelve months is $4.62 billion, with a diluted EPS of $42.32.
ZIM has total cash of $3.26 billion and total debt of $4.35 billion, with a total debt-to-equity ratio of 73.74. Its current ratio is 1.61, and its book value per share is $49.04. The company generated $6.11 billion in operating cash flow and $4.57 billion in levered free cash flow over the trailing twelve months.
ZIM Integrated Shipping and Dividends:
ZIM’s dividend history has been relatively short, as the company only started trading on the New York Stock Exchange in 2021. However, the company has already made an impact in the dividend space by offering an impressive forward annual dividend rate of 16.95 per share, with a yield of 81.26%. While the trailing annual dividend rate is currently at 0.00%, it is important to note that the company is still in the early stages of building its dividend history.
Looking at the payout ratio, ZIM’s current ratio of 55.15% indicates that the company is committed to returning profits to shareholders, while maintaining financial stability. The company’s ex-dividend date of April 3, 2023, is also worth noting for investors looking to benefit from ZIM’s dividend program.
In our opinion, with a relatively short but promising dividend history, a high dividend yield, and a commitment to returning profits to shareholders, ZIM presents itself as a strong contender in the dividend stocks space. Aliff Capital has recently ranked ZIM as the 2nd place holder in their Dividend Stocks list for March 2023, highlighting the company’s potential as a profitable investment opportunity for income-seeking investors. As such, ZIM is definitely worth considering for investors looking to add dividend stocks to their portfolio.
ZIM Integrated Shipping Services Ltd. is undervalued with a low P/E ratio and has strong profitability ratios with high return on equity and return on total capital. However, the company is expected to report a loss in the first quarter of 2023 compared to earnings in the same period in 2022. The annual earnings estimate for 2023 is also lower than the earnings in 2021. Therefore, further research and analysis are recommended before making any investment decisions. Here’s a brief analysis of ZIM Integrated Shipping Services Ltd.’s stock performance:
ZIM Integrated Shipping: Earnings and Estimates:
ZIM has shown strong earnings in recent quarters. In its most recent quarter (ending December 30, 2022), the company reported a net income of $4.62 billion and a diluted EPS of $42.32. This is a significant improvement compared to the same quarter in the previous year, which saw a net income of $19 million and a diluted EPS of $0.18. The company’s revenue for the trailing twelve months is $12.56 billion, with a revenue per share of $104.67.
In terms of estimates, ZIM has not provided forward P/E or PEG ratios, but its trailing P/E ratio is currently 0.44, which is relatively low compared to industry peers. This suggests that investors are willing to pay a lower multiple for ZIM’s earnings compared to its competitors. Additionally, ZIM’s profitability ratios are impressive, with a profit margin of 36.77% and an operating margin of 48.85%.
Analysts have mixed opinions about ZIM’s future earnings potential. The consensus rating for ZIM is a “Hold” with an average target price of $25.09. However, some analysts have a more optimistic view, with a high target price of $50.00. It’s worth noting that ZIM’s recent earnings have been strong, and if the company continues to perform well, it could potentially exceed earnings estimates.
Per Share Data: The company has an earnings per share of $40.31, sales of $90.21, tangible book value of $37.73, and operating profit of $48.73. The company has a working capital of $19.44 and long-term liabilities of $20.76. There is no information on capital expenditure.
ZIM Integrated Shipping: Ratios and Margins:
ZIM has strong financial metrics, with high profitability margins, strong efficiency ratios, and a healthy liquidity and solvency position. As a result, it is a good candidate for investment, and is the second place holder in Dividend Stocks list of Aliff Capital for March 2023. The company has a low P/E ratio of 0.61 (TTM), indicating that the stock is undervalued compared to its earnings. The P/E ratio (including extraordinary items) is even lower at 0.54. The price to sales ratio is 0.65, and the price to book ratio is 1.53. The enterprise value to EBITDA ratio is 0.48, and the enterprise value to sales ratio is 0.29. The company has a high return on equity of 190.99, which indicates that it is generating a high return on shareholder equity. Here is an analysis of the key ratios and margins of ZIM:
Valuation Ratios:
- Trailing P/E: ZIM’s trailing P/E ratio is currently 0.44, which is very low compared to the industry average. This suggests that ZIM’s stock is undervalued relative to its earnings.
- Price/Book (mrq): The price to book ratio of ZIM is 0.45, which indicates that the stock is trading at a discount to its book value.
Profitability Margins:
- Profit Margin: ZIM has a high profit margin of 36.77%, indicating that the company is efficiently converting revenue into profit.
- Operating Margin (ttm): The operating margin of ZIM is 48.85%, which is significantly higher than the industry average. This suggests that the company is efficiently managing its costs and generating profits.
Efficiency Ratios:
- Return on Assets (ttm): ZIM has a return on assets of 35.73%, indicating that the company is effectively utilizing its assets to generate profits.
- Return on Equity (ttm): The return on equity of ZIM is 88.21%, which is higher than the industry average. This indicates that the company is generating strong returns for its shareholders.
Liquidity and Solvency Ratios:
- Current Ratio (mrq): ZIM’s current ratio is 1.61, indicating that the company has sufficient current assets to cover its current liabilities.
- Total Debt/Equity (mrq): The total debt to equity ratio of ZIM is 73.74, which is high but typical for the shipping industry. It suggests that the company is leveraging its assets to finance its operations.
Efficiency:
There is no information provided for revenue per employee or income per employee. The total asset turnover is 1.69, which indicates that the company is efficiently using its assets to generate revenue. Based on the limited available data, it seems that ZIM is performing well in terms of asset utilization but may be facing some challenges in managing its working capital effectively. However, it’s important to note that the shipping industry can be volatile, and companies like ZIM need to be able to adjust their operations quickly to respond to changes in demand and pricing.
Efficiency is a crucial aspect of any business, and it is particularly important for shipping companies like ZIM, which need to maximize the utilization of their vessels to generate revenue. Here are some key efficiency metrics for ZIM based on the available data:
- Asset utilization: ZIM’s return on assets (ROA) for the trailing twelve months (TTM) is 35.73%, which suggests that the company is utilizing its assets effectively to generate profits. A high ROA indicates that the company is generating more income per dollar of assets than its competitors, which is a positive sign.
- Working capital efficiency: ZIM’s current ratio of 1.61 indicates that it has enough current assets to cover its short-term liabilities. However, it is lower than the industry average, which suggests that the company may be facing challenges in managing its working capital effectively.
- Cash conversion cycle: Unfortunately, the available data does not allow us to calculate ZIM’s cash conversion cycle, which is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Liquidity:
The company has a current ratio of 1.84 and a quick ratio of 1.80, indicating that it has sufficient liquidity to meet its short-term obligations. The cash ratio is 1.22, which means the company has enough cash on hand to pay its immediate obligations.
To analyze the liquidity of ZIM, we can look at its current ratio, which is a measure of a company’s ability to pay off its short-term obligations with its current assets. As of the most recent quarter (December 30, 2022), ZIM’s current ratio was 1.61, indicating that it has enough current assets to cover its short-term liabilities.
We can also look at ZIM’s total cash and total debt figures to further assess its liquidity. As of the most recent quarter, ZIM had total cash of 3.26 billion USD and total debt of 4.35 billion USD. While the company’s total debt is higher than its total cash, its current ratio suggests that it still has enough liquidity to meet its short-term obligations.
Additionally, we can look at ZIM’s operating cash flow and levered free cash flow figures. ZIM’s operating cash flow for the trailing twelve months was 6.11 billion USD, indicating that the company is generating significant cash from its operations. Its levered free cash flow for the same period was 4.57 billion USD, which indicates that the company has positive cash flow even after accounting for its debt payments.
Profitability:
The company has a gross margin of 56.33%, an operating margin of 54.02%, a pretax margin of 52.71%, and a net margin of 43.25%. The return on assets is 73.27%, and the return on total capital is 115.58%.
ZIM’s profitability ratios indicate that the company has been generating strong profits. The company’s profit margin over the trailing twelve months is 36.77%, which is quite high and suggests that the company has been able to maintain healthy profit margins. Additionally, the company’s operating margin over the same period is 48.85%, indicating that the company is able to generate strong profits from its operations.
Return on assets (ROA) and return on equity (ROE) are other important metrics to consider when analyzing a company’s profitability. ZIM’s ROA over the trailing twelve months is 35.73%, which is quite impressive and suggests that the company is able to generate strong returns on its assets. ZIM’s ROE over the same period is 88.21%, which is also quite high and indicates that the company is able to generate strong returns for its shareholders.
Capital Structure:
The total debt to enterprise value ratio and the total debt to EBITDA ratio are not available. The total debt to total assets ratio is 33.77%, and the long-term debt to assets ratio is 0.23. There is no information on interest coverage or long-term debt to equity and total capital ratios.
ZIM’s capital structure is primarily composed of debt and equity. As of the end of the most recent quarter (December 30, 2022), ZIM had total debt of $4.35 billion and total equity of $2.25 billion. This gives a debt-to-equity ratio of approximately 1.94, indicating that the company has a relatively high level of debt.
In terms of the breakdown of the company’s debt, ZIM had $2.58 billion in long-term debt and $1.77 billion in short-term debt. The company’s interest expense for the most recent quarter was $54 million.
ZIM’s equity consists of $1.1 billion in common stock and $1.16 billion in retained earnings. The company has not paid any dividends in the trailing 12 months but has declared a forward annual dividend rate of $16.95 per share with an 81.26% dividend yield as of the end of February 2023.
In conclusion, ZIM Integrated Shipping Services Ltd. is a publicly traded Israeli cargo shipping company that has been in operation since 1945. The company has a strong financial position, with a significant market cap and enterprise value. Despite experiencing a decline in revenue growth, the company has maintained strong profitability and operating margins. ZIM also has a solid dividend history, which may make it an attractive option for investors seeking dividend stocks.
However, it is important to note that the shipping industry is subject to various market factors, such as changes in global trade policies and economic conditions. Additionally, the analysis of ZIM’s capital structure reveals that the company has a significant amount of debt, which may increase its financial risk.
Therefore, investors should carefully consider their investment goals and risk tolerance before making any investment decisions regarding ZIM or any other company. This report serves as a tool to aid in the decision-making process but should not be the sole factor in making investment decisions.
Disclaimer:
This analysis report is provided for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any securities. The information presented in this report is based on publicly available information and is believed to be reliable but is not guaranteed to be accurate or complete. Aliff Capital disclaim any liability for any losses that may arise from the use of this report. Investors are advised to conduct their own research and consult with a financial advisor before making any investment decisions.
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