Shares of 8%-Yielding BW LPG Ltd Up 54% Over Last 3 Months
July 21, 2025
Industry Tailwinds Positive for BW LPG Ltd
Industry tailwinds continue to be a compelling reason to keep BW LPG Ltd (NYSE:BWLP), a global leader in liquified petroleum gas (LPG) shipping company, on one’s radar.
As a quick refresher, LPG is a term that describes a family of light carbon gases, the two most popular are propane and butane. The LPG market is experiencing robust growth as the world looks for cleaner, more energy-efficient fuels. LPG, which is known for its low-carbon emissions, is used widely in residential heating, transportation, cooking, and numerous industrial applications.
In 2023, the global LPG market was valued at $157.08 billion. It’s expected to grow 6.5% from 2024 through 2030, reaching more than $244.0 billion. (Source: “LPG Market Size and Growth Outlook to Reach USD 244.11 Billion by 2030,” Industry Today, February 3, 2025.)
Much of that demand is being energized by big imports from countries such as China, India, and Japan. One of the biggest producers of LPG is the U.S. To export this product, countries need to rely on LPG marine shipping companies. One of the biggest and best of these is BW LPG Ltd.
BW LPG is a world leader in LPG shipping, with an operating fleet of over 50 vessels. This includes 31 owned Very Large Gas Carriers (VLGCs), 13 operated/chartered VLGCs, seven VLGCs with its India subsidiary, and two charted medium gas carriers. (Source: “Our VLGC Fleet,” BW LPG Ltd, last accessed July 8, 2025.)
Shipping is the company’s core business, but it also operates two additional arms: BW Product Services and BW LPG Infrastructure.
BW Product Services provides customers with integrated LPG delivery services, purchasing LPG and delivering it directly to buyers and/or receivers. BW LPG Infrastructure sources and transports LPG globally and builds infrastructure locations in key emerging markets around the world.
Robust TCE Performance
For the first quarter of 2025, BW LPG reported robust daily time charter equivalent (TCE) income of $39,800 and $38,000 per calendar day. TCE income came in at $158.7 million, $27.8 million lower than the first quarter of 2024, mainly due to a LPG spot rate reduction of 44% to $39,380 per day. (Source: “Interim Financial Report Q1 2025,” BW LPG Ltd, December 2, 2024.)
The company’s India subsidiary continues to provide stable TCE income of $31.7 million, up 7.5% from $29.5 million in the same prior year period. The increase was mainly from fixed-rate time charters. BW LPG reported first-quarter net income of $46.1 million, or $0.30 per share.
The company ended the quarter with cash and cash equivalents of $280.2 million.
In April, its board of directors approved a share buyback program where the company can purchase up to three million ordinary shares for a maximum amount of $20.0 million. The program started on April 8 and ended on April 17, 2025. During this period, BW LPG purchased a total of 316,437 ordinary shares at an average price of $8.63 per share for a total consideration of $2.7 million.
Looking ahead, for the 2025 calendar year, 28% of available days are secured through fixed-rate time charter-out contracts at $45,000 per day, with an additional two percent hedged $50,600 per day.
As for the broader market, management has said that tariff uncertainty and related short-term market disruptions have created a volatile VLGC market. At the same time, the underlying fundamentals for the LPG shipping market have remained solid. U.S. production of LPG has continued to grow, and export levels remain in line with previous months.
While there is still uncertainty surrounding U.S./China tariffs, management views the prevailing market fundamentals as supportive.
Longer term, the company expects that additional export capacity coming on stream in the U.S. later this year will fuel export growth for VLGCs in the mid to high single digits for the years ahead.
Quarterly Dividend of $0.28 Per Share
Returning capital to investors through its reliable dividend is a big part of BW LPG’s business plan. Since its initial public offering (IPO) in 2013, the company has paid out more than 71% of its earnings as dividends. In 2023 alone, BW LPG paid out 98% of earnings, with that number rising to 123% in 2024. (Source: “Why invest in BW LPG,” BW LPG Ltd, last accessed July 8, 2025.)
Now, because BWLP stock’s dividend is based on earnings, it will fluctuate. In the first quarter, the company declared a dividend of $0.28 per share, or $1.12 per share on an annual basis, for a forward annual dividend yield of 9.47%. (Source: “BW LPG Limited – Key information relating to the cash dividend for Q1 2025,” BW LPG Ltd, May 20, 2025.)
BWLP Stock Up 53% Since April
BWLP stock took a big hit in early April after President Donald Trump unveiled his global tariffs. Concerns about what a global trade war could do to the economy sent stocks reeling.
Since then though, President Trump has, on a couple of occasions, paused much of those tariffs as he and his administration worked on proposed deals. This has renewed investor optimism and sent stocks steadily higher. In fact, the S&P 500 is now at record levels.
BWLP has seen renewed interest, too, rising 53% over the last three months and 20% year to date.
The company’s long-term performance is more impressive. Over the last five years, with dividends reinvested, BWLP has returned total profits of 802%. That’s with dividends reinvested. Had a shareholder elected to take the quarterly dividends and run, the return would slip to 278%.
Chart courtesy of StockCharts.com
The Lowdown on BW LPG Ltd
BW LPG is the world’s leading owner and operator of VLGC vessels. It has a strong balance sheet and is expanding its fleet with management expecting industry dynamics to remain solid for 2025 and over the coming years. This bodes well for the company’s reliable high-yield dividend and share buybacks.
