We recently compiled a list of 12 Best International Dividend Stocks to Buy Now. Since Barrick Gold Corp (NYSE:GOLD) ranks higher on our list, we have analyzed the stock in detail.
As we move toward the second half of 2024, investors are eagerly preparing for the direction that the stock market will take for the remainder of the year. The first quarter of 2024 marked the broader market’s strongest performance for the first quarter since 2019. However, the question remains whether this trend will persist throughout the year. With geopolitical tensions, high interest rates, and higher prices, investors are looking for ways to diversify their portfolios. In this regard, international stocks, which usually fly under the radar, are the most favorable option to explore. And they become even more appealing when they pay dividends.
Dividend stocks are the bread and butter of a diversified portfolio. They have represented nearly 34% of the market’s overall return from 1940 to 2023, with even better performance during periods of high inflation. American companies are mainly known for paying dividends, but foreign counterparts are not far behind in this regard. Expanding your portfolio globally could help you avoid some of the specific challenges faced in the US. For instance, European banks are subject to tighter regulations, resulting in lower levels of interest-rate risk. With a more relaxed regulatory environment, dividends could potentially increase, and buybacks might rise in the international market. In fact, the markets with the highest yields are Norway, Hungary, Romania, and Iceland.
In 2023, Europe played a significant role in driving growth, with record dividend payouts growing by 10.4% compared to the previous year on an underlying basis, according to a report by Janus Henderson. The report further mentioned that annual dividends for the region grew from nearly $169 billion in 2020 to $301 billion in 2023. The trend is expected to continue this year as well as corporate leaders, especially in Europe and Japan, appear to be striking a balance between investing in capital expenditures and meeting operating cash flow requirements, while also showing an inclination to return cash to shareholders through dividends. According to FactSet data, European dividends per share are expected to grow at a CAGR of 8.5% by 2025.
There are no certainties in investing, of course. But we have compiled a list of some of the best dividend stocks from the international market to offer exposure to our readers.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology:
For this list, we initially used a stock screener to identify foreign (non-U.S.) dividend stocks that are traded on US stock exchanges. Subsequently, from this dataset, we selected 12 stocks that boasted the highest number of hedge fund investors from Insider Monkey’s database of Q1 2024. The stocks presented in the article were then arranged in ascending order based on the count of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Barrick Gold Corp (NYSE:GOLD)
Number of Hedge Fund Holders: 51
Barrick Gold Corp (NYSE:GOLD) is a Canadian mining company that produces gold and copper. In the first quarter of 2024, prices for precious metals grew by over 8% due to increased purchasing by central banks and anticipation in the market that the Feds might cut interest rates most probably in June. Gold prices are expected to grow even further mainly due to geopolitical tensions and high interest rates, which creates a favorable environment for the gold mining company. Though the company’s gold production declined to 940,000 ounces in the first quarter of 2024, versus estimates of 947,330 ounces, it still expects a gradual growth in its production throughout the year. This growth trajectory is attributed to the ramping up of operations at its Goldrush mine in Nevada and at Pueblo Viejo, in addition to the restarting of the Porgera mine in Papua New Guinea.
In 2023, Barrick Gold Corp (NYSE:GOLD) produced 4.05 million ounces of gold, compared with 5.4 million ounces of gold produced by its competitor, Newmont Corporation (NYSE:NEM). But does that mean NEM is more efficient than GOLD? Barrick Gold Corp (NYSE:GOLD)’s twelve-month trailing operating margin, which identifies its operational efficiency and profitability, is slightly higher than NEM’s at 24.54%. Though NEM produces a higher volume of gold, it has a negative profit margin of -20.33%, compared with a healthy profit margin of 12.58% for GOLD. This shows that GOLD has a healthy balance sheet as compared to NEM and does not have a higher production cost than its revenue. Moreover, GOLD has a lower debt-to-equity ratio of 14.67%, whereas NEM’s ratio is 32.5%. This shows that, while the higher volume of production may attract investors at first glance, it does not necessarily reflect a healthy balance sheet. While gold prices are presenting a solid outlook for mining companies, we believe that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stocks.
Barrick Gold Corp (NYSE:GOLD) currently has a forward P/E ratio of 15.13. We believe this suggests that the stock is cheap given its growth prospects. The company mainly offers performance-based dividends and its current quarterly dividend comes in at $0.10 per share. With a dividend yield of 2.31% as of June 3, GOLD is one of the best dividend stocks on our list.
Barrick Gold Corp (NYSE:GOLD) remained popular among elite funds at the end of Q1 2024, with hedge fund positions growing to 51, from 43 in the previous quarter, as per Insider Monkey’s database. The collective value of these stakes is roughly $630 million.
Overall, GOLD ranks 2nd among the best international dividend stocks. You can visit 12 Best International Dividend Stocks to Buy Now to see other dividend stocks from the international market. While we acknowledge the potential of dividend stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.