Genco Shipping & Trading Ltd: Triple-Digit Upside Potential for 10%-Yielder?
April 9, 2025
Genco Shipping & Trading Pays 22nd Consecutive Dividend
In spite of President Donald Trump’s recently implemented tariffs and widespread concerns about a U.S. recession, the outlook for the global marine shipping industry remains solid, especially for dry bulk shippers.
In 2023, the global market for dry bulk shipping was $157.8 billion. It’s forecast to hit $186.9 billion by 2030, expanding at a compound annual growth rate (CAGR) of 2.5%. (Source: “Dry Bulk Shipping Industry Business Analysis Report 2024-2030,” Research and Markets, January 16, 2025.)
As a primer, dry bulk shipping is the cornerstone of global trade, moving millions of tons of unpackaged bulk cargo across the oceans. Types of popular dry bulk cargo include grains, minerals, iron ore, coal, and cement.
Dry bulk shipping containers are different from other marine shipping vessels. Where container ships are stacked with containers, dry bulk cargo is not packaged, instead, it is loaded/funneled directly into the vessel’s holds.
One dry bulk carrier worth putting on your radar is Genco Shipping & Trading Ltd (NYSE:GNK).
Genco Shipping & Trading Limited is the largest U.S. based drybulk shipowner, with 42 modern vessels. Headquartered in New York City, Genco has offices in Singapore and Copenhagen. (Source: “Sidoti Virtual Small-Cap Conference,” Genco Shipping & Trading Ltd, March 19, 2025.)
The company’s wholly owned vessels transport both major (iron ore and coal) and minor (grains, cement, fertilizers, etc.) bulk across all key worldwide shipping routes.
Genco Shipping & Trading is always growing and modernizing its fleet. Since 2021, it has invested $283.0 million in its fleet, further expanding its earnings power. Over the last 15 months alone, the company has invested $134.0 million to replace smaller, less fuel-efficient vessels with modern, high-specification Capesize vessels.
Solid Q4 Results
For the fourth quarter ended December 31, 2024, Genco announced that revenue decreased to $99.2 million, from $115.5 million in the same prior-year period. (Source: “Genco Shipping & Trading Limited Announces Q4 2024 Financial Results,” Genco Shipping & Trading Ltd, February 19, 2025.)
The daily time charter equivalent (TCE) rate was $18,007 per day, compared to $17,373 per day in the fourth quarter of 2023. Despite higher TCE rates, Genco’s revenue was lower due to the fact that it operated a smaller fleet during the quarter.
Genco reported fourth-quarter net income of $12.7 million, or $0.29 per share, up 159% from $4.9 million, or $0.11 basic per share, in the fourth quarter of 2023. Its adjusted net income was $12.8 million, or $0.29 per share, which was down from $18.6 million, or $0.43 per share, in the same prior-year period.
For the full year, the company’s revenue increased 10% to $423.0 million. TCE rates increased to $19,107 per day from $14,766 per day in 2023. Net income was$76.4 million, or $1.75 per share, up from a 2023 net loss of $12.9 million, or a loss of $0.30 per share. Adjusted net income was $72.3 million, or $1.66 per share, respectively, more than double the $28.9 million, or $0.68 per share in 2023.
Genco Shipping & Trading ended the year with $44.0 million in cash and $90.0 million in debt, with $337.0 million remaining on its revolving credit facility. It recently tapped $20.00 million under a revolving credit facility to purchase a modern Capesize vessel.
Commenting on the fourth-quarter and full-year results, John C. Wobensmith, the company’s chief executive officer, said, “During 2024, we grew earnings, while continuing to prioritize the three pillars of Genco’s comprehensive value strategy namely dividends, deleveraging and growth.
“Importantly, fleet-wide TCE for the full year increased by 29%, reflecting the strong 2024 drybulk market and our sustained outperformance versus our benchmarks. While freight rates have experienced downward volatility in 2025 to date due to seasonal factors, Genco is well positioned to draw on our industry low financial leverage and cash flow breakeven rate as well as significant access to capital to take advantage of attractive opportunities.”
Quarterly Dividend of $0.30/Share Declared
Genco is pretty transparent when it comes to its dividend; this includes a payout of 100% of quarterly cash flows less a voluntary reserve. For example, in the just-completed fourth quarter, the company reported operating cash flow of $32.41 per share.
Minus a voluntary quarterly reserve of $19.50 per share, this leaves it with cash flow distributable as dividends of $12.91 per share, which resulted in a quarterly dividend per share of $0.30, or $1.20 per share on an annual basis, for a forward dividend yield of approximately 10.26%.
This represents Genco’s 22nd consecutive dividend since the third quarter of 2019. Over that time, it has paid an aggregate of $6.615 per share.
Triple-Digit Upside Potential with GNK Stock?
Even before the markets cratered, GNK stock wasn’t doing well—down 27% over the last year. Since President Trump announced his tariffs, the stock is now down 39% over the last year.
With that said, over the last year, GNK stock has outperformed many of its peers. For example, Breakwave Dry Bulk Shipping ETF (NYSE:BDRY) is down 57% year over year.
Wall Street analysts haven’t updated their guidance since President Trump unveiled his tariffs, so their guidance should be taken with a grain of salt.
In any case, they were certainly bullish. GNK stock is currently trading hands at around $11.60 per share, with Wall Street analysts currently providing a 12-month share price guidance range of $23.00 to $30.00.
Chart courtesy of StockCharts.com
The Lowdown on Genco Shipping & Trading Ltd
Genco Shipping & Trading Ltd is a great marine shipping stock with a diversified fleet, strong cash position, reliable high-yield dividend, and low debt level, as well as the lowest cash-flow breakeven rate among U.S.-listed marine dry-bulk shippers.
Over the last number of years, the company has further executed on all three pillars of its comprehensive value strategy focused on dividends, deleveraging, and growth. Genco has declared its 22nd consecutive dividend, lowered its debt by 80%, and purchased nine modern vessels since 2021.
While GNK stock has been underperforming the broader market, all things considered, its outlook remains robust with analysts forecasting that it could more than triple over the coming quarters. That bullish sentiment is welcome news to the 270 institutions that hold 67.2% of all outstanding shares. The three biggest holders of GNK stock are BlackRock, Inc., Dimensional Fund Advisors LP, and The Vanguard Group. (Source: “Genco Shipping & Trading Limited (GNK),” Yahoo! Finance, last accessed April 1, 2025.)
