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3 Stocks Crushing the S&P 500 in 2022

It’s no secret that the market conditions have been unfavorable for investors throughout 2022. Following a once-in-a-lifetime pandemic, we’ve been thrust into a unique economic environment that has caused the Fed to raise interest rates and become very hawkish in nature. The exciting and high-flying growth stocks that once seemed unstoppable have come to a screeching halt, putting dents in many portfolios.

A great way to limit overall portfolio drawdowns is to find industries that have displayed a high level of relative strength compared to the general market – and that is where the Zacks Industry Rank List comes in for the assist.

Stocks in the Zacks Transportation – Shipping Industry have been hot year-to-date, tallying nearly a 30% return and easily crushing the S&P 500’s decline of 15%. Upon witnessing countless valuation slashes in the double-digits in many stocks, this industry has done quite the opposite and has become a much-needed safe haven for investors’ cash.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Three companies in particular – Eagle Bulk Shipping EGLE, Grindrod Shipping Holdings GRIN, and Star Bulk Carriers SBLK – have all been cruising along in the market year-to-date. The chart below illustrates the stocks’ individual performances throughout 2022 while blending in the S&P 500 for a benchmark.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

As we can see, all three stocks have been significant winners in 2022. What makes these companies even more attractive is that all three carry dividend yields higher than 12%; establishing a source of income during market drawdowns is a major boost. Additionally, all three companies are sporting a coveted Zacks Rank #2 (Buy).

Grindrod Shipping Holdings

Grindrod Shipping Holdings GRIN is an international shipping company that owns, charters in, and operates a fleet of dry bulk carriers. Over the past year, shares have soared a jaw-dropping 250%.

The company sports a beautiful 4.1X forward earnings multiple, well below June 2021 highs of 12.1X. Additionally, the value represents a staggering 78% discount relative to the S&P 500’s forward earnings multiple of 18.1X.

Another bright spot of the company is that it provides a solid revenue stream. GRIN’s current dividend yield sits at a beautiful 12.1%, with a very sustainable payout ratio of 12% of earnings. If the dividend yield wasn’t attractive enough, the payout ratio reflects an ability to pay out its dividends consistently with no issue.

The company also sports strong free cash flow and operating cash flow growth, providing it the flexibility needed to reward investors and consistently reinvest in its operations. From 2020 to 2021, the company’s operating cash flow surged by a remarkable 191%, and free cash flow surged by 190%.

GRIN is a Zacks Rank #2 (Buy) and sports a Value Style Score of an A.

Grindrod Shipping Holdings Ltd. Price, Consensus and EPS Surprise

Grindrod Shipping Holdings Ltd. Price, Consensus and EPS Surprise
Grindrod Shipping Holdings Ltd. Price, Consensus and EPS Surprise

Grindrod Shipping Holdings Ltd. price-consensus-eps-surprise-chart | Grindrod Shipping Holdings Ltd. Quote

Star Bulk Carriers Corporation

Star Bulk Carriers SBLK is a global shipping company that provides worldwide seaborne transportation solutions in the dry bulk sector. Over the last year, shares have soared an incredible 78%.

The company boasts a cheap 4.8X forward earnings multiple, well below 2022 highs of 5.5X. Furthermore, the value also reflects a steep 73% discount relative to the S&P 500.

SBLK also enjoys rewarding its investors handsomely. The company boasts an extremely high dividend yield of 26.7%, and over the last five years, the company has increased its dividend five times. SBLK’s payout ratio sits at 74% of earnings, which is considered to be slightly unsustainable. However, the company has had no issue with consistently increasing its dividend.

The company’s cash flow is very impressive as well. From 2020 to 2021, operating cash flow surged by an immense 350%, and in the same timeframe, free cash flow skyrocketed 550%. These metrics bolster confidence in SBLK’s ability to uphold its high dividend yield.

SBLK sports a Zacks Rank #2 and a Value Style Score of a B.

Star Bulk Carriers Corp. Price, Consensus and EPS Surprise

Star Bulk Carriers Corp. Price, Consensus and EPS Surprise
Star Bulk Carriers Corp. Price, Consensus and EPS Surprise

Star Bulk Carriers Corp. price-consensus-eps-surprise-chart | Star Bulk Carriers Corp. Quote

Eagle Bulk Shipping

Eagle Bulk Shipping Inc. EGLE is a fully integrated shipowner-operator engaged in global transportation, focusing exclusively on the mid-size dry bulk vessel segment. Over the last year, shares have provided a stellar 66% return.

Similar to SBLK and GRIN, the company sports strong dividend metrics. Its dividend yield sits at a notable 12.2%, and over the last five years, the company has increased its dividend twice. It’s worth noting that the company recently started its dividend payments in 2021. Additionally, the company’s payout ratio sits at 63% of earnings.

EGLE’s cash flow statement is quite remarkable. From 2020 to 2021, the company’s operating cash flow exploded by 1560%, and free cash flow skyrocketed by 2540%. Like SBLK with its higher payout ratio, the company’s cash flow metrics instill confidence in its ability to reward shareholders and reinvest in its business.

EGLE is a Zacks Rank #2 (Buy) with a Value Style Score of an A.

Eagle Bulk Shipping Inc. Price, Consensus and EPS Surprise

Eagle Bulk Shipping Inc. Price, Consensus and EPS Surprise
Eagle Bulk Shipping Inc. Price, Consensus and EPS Surprise

Eagle Bulk Shipping Inc. price-consensus-eps-surprise-chart | Eagle Bulk Shipping Inc. Quote

Bottom Line

While the rest of the market has suffered throughout 2022, the Zacks Transportation – Shipping Industry has continued to cruise along, rewarding investors handsomely. It reflects just how critical it is to find industries that have displayed a high level of relative strength. Right now, the high-flying growth and technology names that investors have come to love seemingly have a target on their back with rising interest rates.

All three companies have sound valuation metrics, have witnessed positive estimate revisions across the board, boast strong cash flow statements, have strong dividend yields, and most importantly, boast a strong Zacks Rank #2 (Buy). Additionally, they all sport strong Style Scores for Value. These three stocks would be fantastic areas to park cash for investors looking to limit drawdowns in their overall portfolios.


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Eagle Bulk Shipping Inc. (EGLE) : Free Stock Analysis Report

Star Bulk Carriers Corp. (SBLK) : Free Stock Analysis Report

Grindrod Shipping Holdings Ltd. (GRIN) : Free Stock Analysis Report

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Zacks Investment Research