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KEN is a low volatility on ZIM, and we believe that it's likely to keep offering a minimum 5% yield, on average, per annum over the coming years.
- You may come for ZIM, but you're likely to stay for much more than that.
When it comes to containers, we've talked a lot about ZIM Integrated Shipping Services Ltd (NYSE:ZIM), Corp (DAC), and Triton International Ltd (TRTN).
Here's another related idea that's mostly about container ships, but not just. So much so, that even if you fear of the shipping space (due to volatility), KEN is probably a lower-volatility solution, way more similar to the profile of TRTN than to the profile of ZIM or DAC.
Data by ChartsTruth is, it's probably somewhere in between - in a good way.
From the company's website:.
Holdings Ltd. (KEN) is a holding company that operates dynamic, primarily growth-oriented, businesses. The holdings are at various stages of development, ranging from established cash generating businesses to early stage companies.
Data by Charts.
Primary businesses:.
Energy: OPC Energy (58% HELD).
OPC Energy (“OPC”) is a developer and operator of power generation facilities in Israel. OPC’s portfolio consists of OPC Rotem, a 466MW combined cycle power plant, in operations since July 2013, and OPC Hadera, a 148MW co-generation power plant, currently under construction.
Shipping: ZIM (28% HELD).
ZIM was established in 1945, and has developed into one of the largest carriers in the global container shipping industry. ZIM operates a fleet of approximately 80 container vessels, with a total container capacity of approximately 385,000 TEUs.
Automotive: Note that a 12% stake in Qoros, is a China-based automotive company, got sold in April for $238M.
Most recent financial results:.
Q1/2021 GAAP EPS of $3.34, but as much as it's very impressive, the main thing to look at is how high the TTM EPS, reflecting the container ship booming cycle.
Since KEN is a holding company, it's not about "growth" peruse.
Yes, Q1/2021 revenue of $115M were up +29.2% Y/Y, but the main aspect is how much are the underlying businesses worth and how much money is being received by KEN as dividends from its subsidiaries, essentially ZIM.
Data by Charts.
Why do we like KEN?
1) If you like ZIM - and we do - you can't dislike KEN. It's as simple as that.
Is it possible not to like ZIM at this point in time? The answer is no!
Data by Charts.
Think about it: If ZIM "only" earns what the market is currently expecting it during the years 2021-2023 (about $30-share in total), KEN's 28% stake in this is about $8.4 for every ZIM share it holds.
True, ZIM isn't going to distribute all of it as dividends, but the point we wish to make is that if ZIM is going to earn two-thirds of its current stock price over the next three years, how much is KEN's stake in ZIM would be worth at the end of these three years, and how much dividend would KEN be collecting from ZIM along these three years?
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