Growing concerns over severe economic sanctions imposed on Russia in response to its military invasion of Ukraine have negatively affected the global markets. The geopolitical tensions caused global equity markets to sell-off yesterday. And the prices of oil and natural gas and precious metals surged to multi-year highs. Given current high inflation fears and supply chain issues in most economies, Russia’s energy sector will likely be excluded from the sanctions because it is a major producer and crucial exporter of oil and natural gas.
Although major stocks rebounded later yesterday, with the picture regarding the economic sanctions on Russia becoming clearer, the long-term consequences of these sanctions will likely impact the global economy. Therefore, we think betting on high-yield dividend stocks could be one of the best options for investors seeking to hedge their portfolios from the expected market volatility in the coming weeks.
Fundamentally sound stocks BHP Group Limited (BHP), Sibanye-Stillwater Ltd. (SBSW), and Star Bulk Carriers Corporation (SBLK) have a history of consistent dividend payments and are currently trading at discounts to their peers. So, these stocks could be solid bets now.
BHP Group Limited (BHP)
Headquartered in Melbourne, Australia, BHP discovers, acquires, develops, and markets natural resources worldwide. The company operates through four segments—Petroleum, Copper, Iron Ore, and Coal. BHP extracts and processes minerals, oil, and gas from its production operations in Australia and the Americas, and manages product distribution through its global logistics chain, including freight and pipeline transportation.
BHP paid a $2 per share semi-annual cash dividend on Sept. 21, 2021. The stock pays a $4 per share dividend annually, translating into an 11.63% yield. Its dividend has grown at a 58.59% rate over the past five years. BHP has paid dividends for 12 consecutive years.
On Feb. 9, 2022, BHP announced its decision to increase the direct shipping of supplies from Singapore to Port Hedland by 7.5%, providing local business opportunities and improving regional road safety. BHP’s Pilbara businesses will benefit from the direct shipping route through BHP’s freight provider ANL, reduce the greenhouse gas emissions related to the transportation by up to 75% per container, and reduce overall transport costs for supplies.
For the half-year ended Dec. 31, 2021, BHP’s total revenues increased 27% year-over-year to $30.53 billion. The company’s profit from operations came in at $14.85 billion, indicating a 50.1% rise from the year-ago period. BHP’s net profit came in at $10.51 billion, up 117.6% from the prior-year period. Its EPS increased 108% year-over-year to $1.67. The company had cash and cash equivalents of $12.37 billion as of Dec. 31, 2021.
Analysts expect BHP’s EPS to improve 2.5% year-over-year to $62.32 billion for its fiscal year 2022, ending June 30, 2022. Over the past three months, the stock has gained 14.5% in price and closed yesterday’s trading session at $63.50.
BHP’s 11.73x non-GAAP forward P/E is 18.3% lower than the 14.36x industry average. In terms of forward Price/Cash Flow, BHP is currently trading at 6.04x, which is 26.8% lower than the 8.25x industry average. The company’s EBITDA and EPS have grown at CAGRs of 22.3% and 23.1%, respectively, over the past three years.
BHP’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has an A grade for Quality and a B grade for Value and Stability. Click here to see the additional ratings for BHP’s Growth, Momentum, and Sentiment.
BHP is ranked #6 of 35 stocks in the Industrial – Metals industry.
Sibanye-Stillwater Ltd. (SBSW)
SBSW is an independent, global precious metals mining company headquartered in Westonaria, South Africa. The company’s portfolio includes its platinum group metal (PGM) operations in the United States, South Africa, and Zimbabwe; gold operations and projects in South Africa; and copper, gold, and PGM exploration properties in North and South America.
SBSW paid a $0.79 per share semi-annual dividend on Sept. 30, 2021. The company pays a $1.57 dividend per share annually, representing a 9.04% yield. Its dividend has grown at a 44.29% rate over the past five years. SBSW has been paying semi-annual dividends consecutively for the past year.
On Feb. 4, 2022, SBSW acquired the Sandouville nickel hydrometallurgical processing facility from Eramet SA, a French multinational mining and metallurgy company, for approximately €85 million in cash. Situated in the industrial heart of Europe at Le Havre, France’s second-largest industrial port, the current Sandouville facilities include a hydrometallurgical nickel refinery with high production capacity. SBSW should make full use of the potential of these facilities and gain reach in specific nickel battery metal products.
SBSW’s adjusted EBITDA increased 10.3% year-over-year to $1.02 billion for its fiscal year 2021 third quarter, ended Dec. 31, 2021. Analysts expect the company’s revenue to reach $10.73 billion for the same fiscal year, representing a 38.6% rise from the prior-year period. The company’s EPS is expected to grow at a 4% rate per annum over the next five years.
SBSW has gained 36% in price over the past three months and ended yesterday’s trading session at $17.43. In terms of non-GAAP forward P/E, SBSW is currently trading at 4.56x, which is 68.3% lower than the 14.36x industry average. In terms of forward Price/Cash Flow, SBSW is currently trading at 5.45x, which is 33.9% lower than the 8.25x industry average. The company’s EBITDA and EPS have increased at CAGRs of 99.6% and 333.6%, respectively, over the past three years.
SBSW’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has an A grade for Value and a B grade for Sentiment. Click here to see the additional ratings for SBSW (Momentum, Stability, Growth, and Quality).
SBSW is ranked #10 of 40 stocks in the Miners – Diversified industry.
Star Bulk Carriers Corporation (SBLK)
SBLK is an Athens, Greece-based shipping company that provides ocean transportation for dry bulk cargoes and worldwide vessel management services. The company’s vessels transport a range of major bulks, including iron ores, coal, and grains, as well as minor bulks, such as bauxite, fertilizers, and steel products.
SBLK is set to pay a $2 per share quarterly cash dividend on March 15, 2022. The stock pays an $8 per share dividend annually, representing a 26.45% yield. It has paid dividends for two consecutive years.
SBLK’s total revenues for its fiscal year 2021 fourth quarter, ended Dec.31, 2021, increased 168.7% year-over-year to $499.86 million. The company’s operating income came in at $313.89 million, up 620.7% from its year-ago period. While its adjusted net income increased 925% year-over-year to $305.45 million, its adjusted EPS increased 886.7% to $2.96. As of December 31, 2021, the company had $471.25 million in cash and cash equivalents and restricted cash.
Over the past three months, the stock has gained 39.8% in price to close yesterday’s trading session at $29.34. SBLK’s 4.98x non-GAAP forward P/E is 71.7% lower than the 17.59x industry average. In terms of forward Price/Cash Flow, SBLK is currently trading at 3.84x, which is 71.4% lower than the 13.43x industry average. The company’s EBITDA and EPS have grown at CAGRs of 52.1% and 106.9%, respectively, over the past three years.
SBLK’s POWR Ratings reflect its solid prospects. It has an overall B rating, which equates to Buy in our proprietary rating system.
The stock has an A grade for Growth and Momentum and a B grade for Sentiment and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for SBLK’s Value and Stability here.
SBLK is ranked #6 of 45 stocks in the Shipping industry.
Want More Great Investing Ideas?
BHP shares were trading at $66.91 per share on Friday afternoon, up $3.41 (+5.37%). Year-to-date, BHP has gained 15.93%, versus a -7.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|BHP||Get Rating||Get Rating||Get Rating|
|SBSW||Get Rating||Get Rating||Get Rating|
|SBLK||Get Rating||Get Rating||Get Rating|