The shipping industry has been gradually recovering thanks to rising demand for commodities such as iron ore and coal as several economies resume their manufacturing and industrial activities. Consequently, we think two major players in the shipping industry—Castor Maritime (CTRM) and Danaos (NYSE:DAC)—are well positioned to benefit. But which of these two stocks is a better buy now? Let’s find out.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.