International Sewage (INSW) recently increased its quarterly dividend, and its stock is up about 47% year-over-year. So, let’s evaluate whether this stock is worth adding to your portfolio right now. read on.
International Sea Route, Inc. ,INSW) is one of the world’s leading tanker companies, providing transportation services for crude oil and petroleum products to international flag markets. IT has a fleet of 78 ships, which includes 13 VLCCs, 13 Suezmaxes, five Aframax/LR2s, eight Panamax/LR1s and 39 MR tankers.
INSW increased its quarterly dividend to $0.12 as of June 07, 2022, payable on June 29, 2022. The stock pays a dividend per share of $0.48 annually, which translates to a 2.22% yield. Its shares are up 47.4% year-over-year.
However, the stock has fallen 7.8% over the past month to close yesterday’s trading session at $21.64. While the company’s triple-digit revenue growth could fuel its operational growth, its negative profit margins and lack of profitability could raise investor concerns.
Here’s what could shape INSW’s performance in the near future:
In May, INSW announced the closure of a new senior secured credit facility with a total capacity of $750 million, including a term loan of $530 million and a revolving credit facility of $220 million, of which $70 million as of May 24, 2022. were prepared. The proceeds of the facility were used to pay off three existing senior loan facilities for a total of $575 million at the time of closure.
INSW’s total shipping revenue increased 117% year-over-year to $101.48 million for the first quarter ended March 31, 2022. However, its total operating expenses increased 82.8% from the prior-year quarter to $107.11 million. Its loss from ship operations was $5.63 million. The company had a net loss of $13 million. Its loss per share was $0.26. In addition, its cash and cash equivalents declined 23.8% to $74.55 million for the three months ended March 31, 2022.
negative profit margin
INSW trailing 12 months gross profit margin The rate of 20.2% is lower than the 49.7% industry average of 40.1%. In addition, its trailing-12-month ROA, ROC and net income margins are negative at 5.6%, 2.13% and 40.7%, respectively. In addition, its trailing-12-month asset turnover ratio is 68.5% below its industry average of 0.53%.
POWR ratings reflect bleak outlook
INSW has an overall D rating, which is equivalent to selling owned by us power rating Arrangement The POWR rating is calculated considering 118 different factors, each factor weighted to an optimum degree.
Our proprietary rating system also evaluates each stock based on eight different categories. INSW has a D grade for quality. The poor profitability of the company is commensurate with the quality grade.
Out of 44 stocks in A-rated shipping Industry, INSW is ranked #42.
In addition to what I said above, you can check out INSW ratings for Growth, Stability, Price, Momentum and Sentiment. Here,
While the company has made several strategic advances to boost its operating performance, its lack of profitability and high cash burn are concerning. Furthermore, given its negative profit margin, we think it is best to avoid the stock for now.
How does International Sea Route (INSW) stack up against its peers?
While INSW has an overall D rating, one may wish to consider its industry peer, Overseas Shipholding Group Inc. ,osg), Matson Inc. ,MATX), and Grindrod Shipping Holdings Inc. ,smiling), which has an overall A (strong buy) rating.
Shares of INSW fell $0.57 (-2.63%) in premarket trading on Wednesday. Year-on-year, the INSW has gained 44.78% compared to a gain of -22.11% in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an Equity Research Analyst and Financial Journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a second tier candidate.
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