ZIM’s 80% Dividend Is A Dream Come True – Part 2 (NYSE:ZIM) – Seeking Alpha

September 22, 2022 by No Comments


ZIM (NYSE:ZIM) delivers buckets of money to investors by returning around 30% of profits to them. Like ZIM’s ships, those buckets show no signs of leaking. That low P/E both undervalues ZIM and distorts the dividend in percentage terms but the huge cash payout shows a more accurate story.

ZIM is categorised as a Transport Industrial and Tesla (TSLA) as a Consumer Discretionary. Both are cyclical and so exposed to economic downturns.

I have written several articles on Tesla. The most recent was Tesla Is Past Its Sell By Date.

My sole article on ZIM, so far, is ZIM’s 80% Dividend Is Not Too Good To Be True and the title of today’s is the conclusion of that one.

All my Tesla articles and that sole ZIM article have generated many comments. There was a huge difference in the tone of the comments. Many of the Tesla comments – some rude – were by people who can be only described as Elon Musk worshippers.

Those on ZIM were polite, mostly reflective, and showed more than a little confusion. Confusion is perhaps the only outcome possible given what the market has delivered.

Taking the end of June’s second half results shows us that dramatically:

Tesla – Net margin 13.3%. ZIM – Net margin 39%

Tesla – ROE 31% ZIM – ROE 178%

Tesla – P/E 109 ZIM – P/E 0.63.

Tesla insiders have been selling only since June 2020 and that has continued this month, September 2022! No ZIM insider has sold.

The world’s largest airfreight carrier, FedEx (FDX) has just released lousy news about its business, blaming a world recession for that. That day, Tesla’s stock price went down 0.13%. ZIM’s sank 4.4% – over 30 times as much! And that sent the dividend soaring up to nearly 88%!

I use Tesla simply to highlight the extremes existing in today’s market with it and ZIM being at opposite ends. Tesla is priced higher than perfection while ZIM is dumped on the brink of bankruptcy end – a near-blind denial of reality and facts for both.

This article is not an anti-Tesla article, it is a pro-ZIM article, and given ZIM’s facts, I shall start first with more about it and its financial health…

ZIM Integrated Shipping Services Ltd.

ZIM is an Israeli-based shipping company established in 1945 and transformed in recent years under new management into a container-only shipping company. It had its IPO on the NYSE last year (Jan 2021) and was one of the best-performing IPOs that year on the back of super financial results following the transformation. Their average revenue per TEU (a 20-foot container to us laymen) by quarter from 2020-2022 left competitor’s ships in its wake…


According to marine digital data, ZIM now has the world’s 10th largest liner fleet, with less than an eighth the capacity of the largest one, Maersk (OTCPK:AMKAF).

It has an asset-light model that is a non-balance sheet “asset” in bad business conditions because its fleet is almost entirely chartered in. 94% of ZIM’s vessels are chartered. …….

Source: https://seekingalpha.com/article/4542394-zims-80-percent-dividend-is-dream-come-true-part-two


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