We recently compiled a list of the 12 Best International Dividend Stocks to Buy Now. Since LyondellBasell Industries NV (NYSE:LYB) is part of the 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.
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).
5. LyondellBasell Industries NV (NYSE:LYB)
Number of Hedge Fund Holders: 40
LyondellBasell Industries NV (NYSE:LYB) ranks fifth on our list of the best international dividend stocks. The Netherland-based chemical industry company that specializes in plastics, chemicals, and refining. Recently, the company finalized the purchase of a 35% stake in the National Petrochemical Industry Company (NATPET), located in Saudi Arabia, from Alujain Corporation. Through this acquisition, the company expects to grow and expand its core business in the region. In addition to this recent strategic move, it has a long history of acquisitions and expansions, which has benefitted the stock price over the years. Over the past five years, the stock has surged by nearly 20%.
For the first quarter of 2024, LyondellBasell Industries NV (NYSE:LYB) reported better-than-expected results. Its revenue of $9.93 billion topped the estimates by $289.50 million, while its EPS of $1.53 beat the consensus by $0.16. Moreover, the company has upped its quarterly dividend by 7.1% to $1.34 per share, which gives its stock a yield of 5.6%.
In the last several quarters, LyondellBasell Industries NV (NYSE:LYB) experienced a minor decline in sales amid soft global demand for durable goods and higher energy costs in Europe caused by the Russian invasion of Ukraine. At the same time, geopolitical tensions in the Red Sea region complicated the logistics for cheaper imports. Amid the issues it faces in Europe, LyondellBasell is considering strategic alternatives for its European assets, including selling, restructuring, and closing of certain facilities.
LyondellBasell Industries NV (NYSE:LYB) was a part of 40 hedge fund portfolios at the end of Q1 2023, showing a decrease from 46 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of over $740 million.
Overall, LYB ranks 5th 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.