Castor Maritime Vs. Danaos: Which Shipping Stock Is A Better Buy?

brown cargo ship on sea under blue sky during daytime

Source: Unsplash 

Castor Maritime Inc. (CTRM) and Danaos Corporation (DAC) are two established players in the shipping industry. Based in Limassol, Cyprus, CTRM provides seaborne transportation services for dry bulk cargo, including iron ore, coal, grains, and steel products. Based in Piraeus, Greece, DAC owns and operates containerships across Australia, Asia, Europe, and the United States. Its principal business is the acquisition and operation of vessels.

Most shipping companies were hit severely by the COVID-19 pandemic due to social distancing restrictions and a contraction of international trade. However, because economies worldwide are resuming manufacturing and infrastructure activities, the demand for commodities, which are transported primarily by sea, is increasing. This is generating increased demand for shipping services. According to Globe Newswire, the global dry bulk shipping market is expected to grow at a 5.10% CAGR between 2020 – 2027. As a result, both DAC and CTRM should witness increasing demand for their services.

While DAC has gained 1,106.4% over the past nine months, CTRM has returned nearly 176%. In terms of past six months’ performance, DAC is again a clear winner with 344.5% returns versus CTRM’s 145.4%. But which of these two stocks is a better pick now? Let’s find out.

Latest Movements

On May 17, CTRM announced that it had entered agreements through two separate wholly-owned subsidiaries to acquire a 2013 Japanese-built and a 2014 Korean-built Panamax dry bulk carrier from unaffiliated third parties for $19.06 million and $21 million, respectively. This expenditure could take a toll on the company’s already weak financials.

On May 11, 2021, DAC announced that its board of directors had approved a dividend reinvestment plan that offers its shareholders the opportunity to purchase additional shares by having their cash dividends automatically reinvested in its common stock. For those who choose not to participate in the program will receive cash dividends, as declared and paid. The program shows the company’s interest in growing its organization aggressively by reinvesting its earnings.

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Anne Davis 3 weeks ago Member's comment

Really not a fan of $CTRM.