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Safe high dividend stocks: Europe
10
Mar
Safe high dividend stocks: Europe

 

The companies’ dividends in today's ranking are not only high, but are also covered by the profits and are paid regularly.

Dividends are quite a tender aspect of today’s business environment. Most long-term investors pay much attention to them, while it is another opportunity for them to get passive income without excessive effort. Most successful companies, however, do not pay dividends. On the contrary, some companies paying high dividends may collapse due to insufficient investments into business development. An investor should find a sensible balance between dividend sizes and company reliability, and this is what we would like to help with.

Today’s overview features European companies with highest dividends possible that meet the following criteria:

  • The company has been paying dividends for at least seven years. It is necessary to make sure that dividends are not just a single-time surprise to attract investors.
  • The sum paid as dividends does not exceed the profits. In other words, the product of the P/E coefficient and annual dividends is not higher than 100%. Many companies that do not meet this requirement and pay high dividends at a loss for this or that reason. Obviously, such companies cannot be called stable.
  • The company’s capitalization exceeds 140 million euro. This quite moderate limit was set to include more or less well-known companies into our overview.
  • The quotes experienced a fall (if any at all) of no more than 60%. This limit was introduced to leave out companies with obvious problems. In most cases, such drastic stock price falls lead to dividends elimination.

As a result, we got a list of truly interesting companies. They all pay high dividends around 6-7% per year and have moderate P/E coefficient, 2–14, which means their quotes are not likely to fall in the near future.

The charts are given in the traded currency. Other data can be given in either traded currency or in euro. Letter M means millions, B stands for billions.

1. Navios Maritime Acquisition

Giant tanker Navios Titan

  • Ticker: NNA
  • Stock Exchange: New York Stock Exchange
  • Country: Monaco
  • Currency: USD Capitalization: $305M, €287M
  • Annual turnover: $313M, €295M P/E: 5.0
  • Annual dividends: 10.0%
  • Dividends/profit ratio: 50%
  • Years of continuous dividend payment: 7
  • Yearly quotes change (USD): —4%
  • Yearly quotes change (EUR): —1%
  • Profit change for 5 years: ?

About the company. Tankering company engaged in oil transportation. It owns 38 ships, including 8 supertankers, with gross displacement of over 4 million tons.

In the chart. Quite like many other tankering companies, Navios experienced a downfall in 2016. They reached a long-time minimum in November, but got back to the January level by the end of December. The company pays dividends four times a year, and their size is stable and does not depend on the stock prices — 0.2 USD per year.

Pros for investors. Championing extremely stable dividends, low P/E, ideal dividend-profit coverage.

Cons for investors. Significant cons have not been found.

2. Capital Product Partners

Akadimos containership

  • Ticker: CPLP
  • Stock Exchange: NASDAQ
  • Country: Greece
  • Currency: USD
  • Capitalization: $434M, €409M
  • Annual turnover: $220M, €207M P/E: 9.2
  • Annual dividends: 9.2%
  • Dividends/profit ratio: 84%
  • Years of continuous dividend payment: >9
  • Yearly quotes change (USD): —24%
  • Yearly quotes change (EUR): —21%
  • Profit change for 5 years (USD): +20%
  • Profit change for 5 years (EUR): +44%

About the company. Maritime logistics company with 35 ships, including 24 tankers, 10 containerships and one dry-cargo vessel. It lends its ships to such famous companies as BP, Hyundai, Petrobras, and Repsol.

In the chart. This chart looks very much alike the one of Navios, disregarding the significant growth at the end of the year. The dividends are paid four times a year. Until 2016 they amounted to 0.92 USD, but then they were decreased following the quotes fall, still remaining quite high, though.

Pros for investors. High dividends, the highest profit growth during the last five years among the companies in this overview.

Cons for investors. Comparatively high P/E if taking into account the recent quotes decrease. Unlike Navios’. Capital’s quotes still have room to fall.

3. E.ON

Nuclear power plant in Brunsbüttel

  • Stock Exchange: Deutsche Börse
  • Country: Germany Currency: EUR
  • Capitalization: €13B
  • Annual turnover: €116B P/E: 2.4
  • Annual dividends: 7.5%
  • Dividends/profit ratio: 18%
  • Years of continuous dividend payment: 8
  • Yearly quotes change: —8%
  • Profit change for 5 years: ?

About the company. The largest energy supplier in Germany that operates both in domestic and foreign markets. E.ON is presented in 30 countries including Russia, and serves over 33 million clients. Besides, it owns 6 nuclear power plants in Germany. It is embraced in DAX index (30 largest companies in Germany.) E.ON has had problems with rentability lately. In particular, it finished 2015 in losses, but returned to the profits in 2016.

In the chart. E.ON’s stock prices have been decreasing for several years already. They have fallen by four times since 2011. The company pays dividends once a year, and their size is quite significant regarding the current stock price.

Pros for investors. High dividends, the best dividend-profit coverage in this overview, extremely low P/E, enormous yearly turnover as compared to the capitalization and significant support of the German government that will not let the company wreck despite all the recent problems.

Cons for investors. The long-term negative trend of the stock prices that is still there even after reaching a profitable level.

4. Sponda Oyj

CityCenter, a large trading center built in 1967 and renovated by Sponda

  • Ticker: SDA1V
  • Stock Exchange: NASDAQ OMX Helsinki
  • Country: Finland
  • Currency: EUR
  • Capitalization: €1.4B
  • Annual turnover: €231M P/E: 5.3
  • Annual dividends: 7.3%
  • Dividends/profit ratio: 38%
  • Years of continuous dividend payment: 7
  • Yearly quotes change: +9%
  • Profit change for 5 years: +14%

About the company. Development company operating in Finland and Russia. It is mainly specialized in office, retail, warehouse and transport spaces. It constructs new buildings and restores old ones, and sells or leases them afterwards.

In the chart. The company’s stock prices have been quite stable for several years, and are slightly growing now. The dividends are paid once a year, and their size is stable as well. In 2016, there were additional payments, though.

Pros for investors. Low P/E, high dividends, ideal dividends to profit ratio, increasing profits, gradually growing stock prices.

Cons for investors. Significant disadvantages have not been found yet.

5. Union Financiere de France Banque

The company’s logo

  • Ticker: UFF
  • Stock Exchange: Euronext Paris
  • Country: France
  • Currency: EUR
  • Capitalization: €404M
  • Annual turnover: €262M P/E: 14
  • Annual dividends: 6.8%
  • Dividends/profit ratio: 96%
  • Years of continuous dividend payment: >17
  • Yearly quotes change: +4%
  • Profit change for 5 years: —2%

About the company. Financial company that is mainly engaged in assets management. UFF invests client’s money in different funds, insurances and real estate. The company also provides banking and consulting services, and works with real estate.

In the chart. In 2011–2012 UFF’s stock prices halved, but since then they have recovered by a half. In 2016 they fluctuated between 22 and 26 euro. The company pays dividends twice a year, their size has been rather stable until 2016 when it reached a maximum.

Pros for investors. High stable dividends paid out for years, comparatively stable stock prices.

Cons for investors. The greatest P/E ratio in this overview, the lowest dividends to profit ratio.

6. EDP (Energias de Portugal)

Alto Lindoso, hydro power plant in Portugal serviced by EDP

  • Ticker: EDP
  • Stock Exchange: Euronext Lisbon
  • Country: Portugal Currency: EUR
  • Capitalization: €10B
  • Annual turnover: €16B P/E: 12
  • Annual dividends: 6.6%
  • Dividends/profit ratio: 77%
  • Years of continuous dividend payment: >15
  • Yearly quotes change: —13%
  • Profit change for 5 years: —2%

About the company. The largest energy provider in Portugal and one of the largest companies in Europe. It operates in Macao, Brazil, the US and several African countries. EDP produces the greater part of the energy from renewable sources, which is truly uncommon for such large-scale companies. In particular, EDP is rated fourth among the largest wind energy producers in the world.

In the chart. As opposed to many other companies, after the crisis in 2008, EDP’s stocks cheapened gradually, having reached the minimum in 2012. By 2014, the stock prices recovered a little, but soon went down again. The company pays dividends once a year, and they are stable: 0.17 to 0.19 euro per stock.

Pros for investors. High and very stable dividends paid for a long period of time.

Cons for investors. Significant disadvantages have not been found.

7. REN (Redes Energeticas Nacionais)

Oil reservoirs owned by REN

  • Ticker: RENE Stock Exchange: Euronext Lisbon
  • Country: Portugal Currency: EUR
  • Capitalization: €1.4B
  • Annual turnover: €819M P/E: 12
  • Annual dividends: 6.4%
  • Dividends/profit ratio: 74%
  • Years of continuous dividend payment: >8
  • Yearly quotes change: —6%
  • Profit change for 5 years: +5%

About the company. Energy provider. The company owns transmission networks, petroleum storages and pipelines in Portugal, and builds them and maintains by itself.

In the chart. REN’s stock prices are very stable: for several years they have been fluctuating between 2 and 2.8 euro. Like EDP, REN is also stable in dividend payment — each year they pay out 0.17 euro per stock.

Pros for investors. High and stable dividends, stable quotes.

Cons for investors. Significant disadvantages have not been found.

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