Two Water Transport Plays... Besides DryShips

The water transportation sector has seen incredeble growth over the past years and has spawned well know success stories such as DryShips (DRYS). Like much of the rest of the market, the industry has been hit by the recent slowdown. There is no doubt in my mind, however, that when the market begins to recover, the water transport industry will be very attractive. That being said, I have found a couple of alternatives to DRYS, just in case you don't like it for one reason or another.

Genco Shipping and Trading (GNK) is a stellar company and big investors have noticed. It is almost 75% institutionally owned and is slightly undervalued when looking at its P/E ratio. It has a strong return on equity of 33% and shows very strong margins and aggressive management of its debt. On top of all of this, it pays a 6% dividend. Definitely worth a look.

Diana Shipping (DSX) has just about doubled in the last three years. While this may not sound as impressive as some of its competitors, it has the potential to make you much more than that in the next three. The stock currently pays an 11% dividend and has one of the highest EPS growth rates in the industry. It's P/E is on par with its competitors and it boast a profit margin higher than 92% of its competitors.

While both of these may be attractive, it is important to understand that we are experiencing a slowdown that has affected the entire global economy. The slowdown is likely not over and I would, therefore, wait on buying into the shipping industry. Nonetheless, these are two great companies that will be even more attractive as the market bottoms.