We recently compiled a list of 12 Best International Dividend Stocks to Buy Now. Since Sanofi SA (NASDAQ:SNY) 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.
Photo by Annie Spratt 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).
8. Sanofi SA (NASDAQ:SNY)
Number of Hedge Fund Holders: 24
Next on our list of best international dividend stocks is French pharmaceutical company Sanofi SA (NASDAQ:SNY), whose stock has a yield of 4.17%. In February, Sanofi raised its annual dividend by 5.6% to €3.76 ($4.09) per share. This marked the 29th annual dividend hike for the company.
Sanofi SA (NASDAQ:SNY)’s stock took a big hit in October after the company decided to abandon its previously set 2025 profit target. In addition, Sanofi also made significant changes to its business strategy to concentrate on its core pharmaceutical business. The company is in the process of spinning off its consumer healthcare division, which contributes around 10% of its revenue. The division is expected to be valued at around €20 billion ($21.78 billion).
Sanofi SA (NASDAQ:SNY) started 2024 on a positive note, reporting €10.5 billion ($11.43 billion) in net sales for the first quarter of the year, up by 7% on the year and beating the estimates by some $300 million. The company’s eczema drug, Dupixent, accounted for roughly €3 billion ($3.27 billion) of the top line and showed a 25% increase from the prior-year period. This performance has put the company on a pace to achieve €13 billion ($14.16 billion) in Dupixent sales in 2024. The company’s promising outlook for Dupixent sales, its recent earnings, and the potential spin-off of its Consumer Healthcare division could all contribute to a boost in the stock’s value.
There were 23 funds tracked by Insider Monkey that held shares of Sanofi SA (NASDAQ:SNY) with a total value of $1.0 billion, down by nine funds over the quarter.
Overall, SNY ranks 8th 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.