We recently compiled a list of 12 Best International Dividend Stocks to Buy Now. Since Unilever PLC (NYSE:UL) 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 Dan Dennis 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).
Unilever PLC (NYSE:UL)
Number of Hedge Fund Holders: 20
Unilever PLC (NYSE:UL) is a multinational consumer goods company, headquartered in London. The company operates in a wide range of sectors of the consumer goods industry, including personal care, food and beverages, and cleaning agents. On May 15, the company declared a quarterly dividend of $0.455 per share, which was in line with its previous dividend and which provides its stock a yield of 3.42%.
Companies from the consumer staples industry are known for adding stability to a portfolio due to their defensive nature. Unilever PLC (NYSE:UL) also offers products and services that are in demand, irrespective of the market conditions. Though the sector is experiencing a little disruption because of high interest rates and investors’ preference for AI stocks, companies in this sector reported stable results for the past several quarters. Unilever PLC (NYSE:UL) reported an underlying sales growth of 4.4% on a year-over-year basis in the first quarter of 2024. In addition to this, its volume growth increased to 2.2%, while its competitor, Procter & Gamble Co (NYSE:PG) saw flat sales volume in the first quarter. Unilever has a significant foothold in emerging markets, reporting underlying sales growth of 5.4% and volume growth of 3.9%. Its recent earnings have given investors optimism about the company’s streamlined business operations. Moreover, Unilever PLC (NYSE:UL) expects this year’s underlying sales growth to be in the range of 3% to 5%, in line with its multi-year forecast.
In addition to its strong financial results, Unilever PLC (NYSE:UL) also has a clear plan for future projects. The company is rapidly implementing its Growth Action Plan, which is supported by its commitment to concentrate on fewer initiatives but doing them better and with greater impact.
Insider Monkey’s data for the first quarter indicates that 20 hedge funds owned stakes in Unilever PLC (NYSE:UL) with a total value of $952.5 million, a decrease from 25 in the previous quarter. Israel Englander’s Millennium Management has boosted its position in the company by 200% to 1.78 million shares.
Overall, UL ranks 9th 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.