Possible hidden dividend superstars

How many of you follow a dividend strategy or have a dividen portfolio?

Here some thought and analysis to dividend stocks from my watchlist (and portfolio), which most probably not many people know about:

1. Ahold Delhaize (AD.AS): A Global Retail Giant

Ahold Delhaize is a major global food and retail chain with 7,600 store locations and over 400,000 employees.

Key facts:

• Its revenue has consistently grown, reaching 91 billion euros in 2022, generating substantial free cash flow.
• The company offers a solid dividend yield of 3.4% with a low payout ratio of 40%, leaving room for further dividend increases. Over the past years, the dividends have grown at an average annual rate of 13%.
• With a market cap of approximately 30 billion euros and a P/E ratio of 12, Ahold Delhaize presents an attractive combination of growth, dividends, and valuation.

2. Wienerberger (WIE.VI): Dominating the Construction Industry

Wienerberger, a major player in the global construction industry is the world's largest brick producer and a leading roof tiles manufacturer in Europe. Its stable business is supported by the constant demand for construction materials.

Keyfacts:

• In 2022, the company experienced an impressive 25% revenue growth, generating over one billion euros in operational EBITDA.
• Constant net margin at 3% and operating margin at ~4%
• The return on capital employed (ROCE) has consistently increased, making it an appealing choice for growth investors.
• It offers a solid dividend yield of 3.3% with a moderate payout ratio of 20%. The company has been increasing its dividends by 30% annually.
• With a market cap of 2.8 billion euros and a P/E ratio of 7.7,
• Promising Potential: Strong growth prospects in the electric vehicle raw materials sector

Overall Wienerberger is a package of growth, dividends and an attractive valuation.

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3. Rio Tinto (RIO) and BH (BHP): Commodity Sector High-Yield Stocks

Rio Tinto and BHP are high-yield dividend stocks in the commodity sector, subject to market conditions.

Key facts:

• Rio Tinto, a large mining company, experienced a decline in 2022 and 2023 due to falling commodity prices, leading to a net margin of 22% and operating margin of 37%
• Its flexible dividend policy offers a base dividend of 40 to 60% of earnings, resulting in a dividend yield of 6 to 9%.
• With a market cap of 105 billion dollars, revenue of 55 billion, and a P/E ratio of 8.3, it's a slightly speculative stock, but its focus on renewable energy and electric vehicle adoption adds to its appeal.

On the other hand, BHP is more focused on copper and nickel mining.

Key facts:

• It achieved an impressive 13 billion dollars in EBITDA with a 54% margin in the first half of fiscal year 2023.
• Like Rio Tinto, BHP has a flexible dividend policy, currently offering an 8% dividend yield.
• With a market cap and P/E ratio of 8, BHP is also a high-dividend stock with growth potential in the electric vehicle raw materials sector.

Both stocks require attention to market fluctuations, and it's advisable to trade on the UK listing to avoid dividend withholding tax.

4. Mowi (MOWI.OL) and Leroy Seafoods (LSG.OL): Dominating the Salmon Industry

Mowi is the largest global salmon producer.

Key facts:

• strong growth with 5 billion euros in annual revenue and over a billion euros in operational EBITDA. Net margin of 16% and operatin margin of 20% in 2022
• As a dividend stock, Mowi offers a solid 5% dividend yield with a 45% payout ratio, leaving room for future increases.
• The valuation, with a P/E ratio of 10, seems reasonable considering the stable business and growth prospects.

The positive market trend indicates increasing demand for salmon, creating potential for further growth. However, you should note that withholding tax needs to be manually reclaimed.
Leroy Seafoods, operating also in the salmon sector. The difference here compared to Mowi is that Leroy Seafoods is not just involved in breeding and farming, but also in fishing and processing various fish species like cod and haddock.

Key facts:

• Company has experienced significant revenue and earnings per share growth.
• Net and operating margin around 10% and 11% in 2022.
• The dividend has steadily risen, currently offering a 6.1% yield with a 67% payout ratio.
• Despite recent stock price fluctuations due to market conditions, the P/E ratio of 8.6 appears relatively cheap.

You should analyse the impact of factors such as lower harvesting quantities, selling prices, and currency fluctuations to make informed decisions about the stock's short-term prospects.

5. Evergy (EVRG): Riding the E-Commerce Boom

Evergy is an energy utility serving Kansas and Missouri, with a focus on sustainable sources like solar and wind energy. The company aims to increase its share of renewable energy to nearly half by 2030, benefiting from the e-commerce boom.

Key facts:

• Evergy has achieved significant revenue and earnings per share growth over the past 20 years. It has over half a million employees and a revenue of approximately 100 billion dollars.
• Net margin of12% and operating margin of 23% in 2022.
• Evergy is recognized for its continuous dividend growth, raising dividends for 18 years with an average annual increase of around 8%. The current dividend yield of 4.2% is attractive, and the company aims for 6 to 8% growth in earnings per share, prioritizing dividend growth in its management strategy.
• With a market cap of 13 billion dollars and a 9-year low P/E ratio, Evergy is an attractive stock from a value perspective.

6. Elisa Oyj (ELISA.HE): Telecom Provider with Multiple Business Models

Elisa Oyj is a Finnish and Estonian telecommunications provider involved in software and video production sectors. Despite a unique combination of business models, the company's financials are impressive.

Key facts:

• Over the years, revenue, earnings per share, and dividends have seen significant growth with a constantly rising net margin above 21%
• With a dividend yield of 4.7% and a payout ratio of around 90% Elisa has consistently increased its dividend for the past decade, with an average annual increase of 10%.
• With a current P/E ratio of approximately 20, Elisa is an interesting stock that requires further analysis of its business model.

7. Archer Daniels Midland (ADM): The Hidden Gem

Archer Daniels Midland (ADM) is a well-established company in the food production industry, focusing on staple foods like starch, flour, oils, and flavorings with impressive financials.

Key fact;

• Over 100 billion dollars in revenue and a market cap of 51 billion dollars
• ADM's operating profit has shown substantial growth, especially in 2022 (net and operating margin about 4%)
• The company distributes about 30 to 40% of its earnings as dividends to shareholders. Over the past decade, ADM's dividend has seen remarkable growth, with an average annual increase of 10%.
• Despite a current dividend yield of around 2.2%, which may appear low, but you should consider that only 20% of earnings are currently paid out and ADM has been increasing dividends for an impressive 48 years.
• With a P/E ratio of 10, ADM is an excellent stock offering a combination of dividends and growth potential

8. Southern Copper (SCCO): A Copper Mining Giant

Southern Copper is a company operating in the raw materials sector with a focus solely on copper mining in Mexico and Peru. It holds the largest reserves of copper among all publicly listed companies and has a strong track record of dividend growth.

Key facts:

• The company's financial performance has been positive, with a stable copper price, increasing EBITDA, reduced debts, and rising free cash flow.
• However, the dividend payout has been volatile each quarter, with a yield of about 5.5% based on the current stock price, which saw shareholders receiving one dollar per share in Q1 and Q2 of 2022.
• The company experienced a slight dip in earnings per share in the last year, which may impact its future performance.

Southern Copper presents an interesting opportunity for you if you are interested in combining dividends with the growth potential of electric mobility and the raw material copper.

9. UPS: Leveraging the E-Commerce Boom

UPS is a well-known package delivery service benefiting from the e-commerce boom. With significant barriers to entry, it has a strong competitive advantage in the market alongside DHL Express and FedEx. The company has over half a million employees and approximately 100 billion dollars in revenue, reflecting its impressive scale and infrastructure.

Key facts:

• Both revenue and earnings per share have shown remarkable growth over the past two decades.
• UPS currently offers a 3.3% dividend yield, continuously increasing dividends for over 13 years and maintaining them for 23 years. The payout ratio is around 50%, indicating a solid dividend profile.
• With a market cap of 160 billion dollars and a P/E ratio of 15, the company's valuation appears fair for its stable and sustainable business model.

As the e-commerce sector is expected to continue growing, UPS presents an interesting investment opportunity with its strong position in the package delivery market and potential for consistent dividends.

Summary

What are your thought about the future if this companies? Do you know all the listed stocks or do you even have any of them in your portfolio?

Disclaimer: The information provided in this post is for informational purposes only and should not be considered investment advice. Always conduct your due diligence and consult with a qualified financial advisor before making any investment decisions.