You dividends represent a portion of a company’s profit that is divided among its shareholders. They are one of the main ways to get money from actions and, therefore, investors may plan to invest in a certain asset due to the expectation of high dividend distribution.
Various houses of investments they build recommended stock portfolios specifically thinking about assets with a history, or forecast, of robust dividend payouts.
However, the dividend depends on each company’s profit, and therefore it is linked to the macroeconomic, sector and individual issues of each company, with their influence on corporate performance.
For the month of November, investors’ attention is focused on PEC of Precatório, and how the government will finance the Brazil Aid. Furthermore, inflation and rising interest affect the economy, which continues in a post-pandemic recovery process with the advance of vaccination.
O CNN Brasil Business gathered the 10 most cited stocks in the dividend portfolios for the month of November. It was created based on recommendations from XP Investimentos, BTG Pactual, Órama, Genial Investimentos, Guide, Nu Invest and Investmind.
The most recommended asset was the Taesa unit (TAEE11), a company in the electricity sector, followed by mining company Vale (VALE3) and by Bradesco (BBDC4). Check out:
Comment: Investments Guide
“The company continues with solid execution of the new concessions, in addition to the attractive dividend yield [rendimento do dividendo] where the shares are being traded. Taesa’s low regulatory risk, which has long contracts, maturing as of 2030, is another highlight. The company historically reports constant and robust cash generation, with very high margins.
Among the risks, we highlight the development of new projects, which may have delays and costs higher than expected, and the delay in the process of integration of new operating assets acquired”.
Comment: BTG Actual
“We’ve been getting a lot of inquiries lately about the recent underperformance of bank stocks as many investors expected the sector to become more defensive in the current inflation/higher interest rate scenario. Overall, we see a constructive scenario for the sector.
The financial margin with clients could grow above 10% in 2022, with delinquencies and provisions under control.
And despite a loss ratio that has not yet dropped to historic levels within Bradesco Saúde, the bank’s shares trade at 1.3x P/VP (Share price/book value), and an estimated dividend yield of 7.9%, so we see stocks trading at attractive levels.”
“Vale is one of the largest mining companies in the world and captured the upward movement in commodities in the first half of the year.
With the sharp drop in the price of iron ore reaching US$ 90 per ton, the target price reflects a lower level in the company’s revenues this year, but we have already observed a stabilization of the ore at around US$ 120 per ton , which is in line with our expectations for the annual and long-term average that remains until 2024, so we see a considerable upside for the paper.
We continue with our thesis that Valede must continue to be efficient in the operation and to present a high dividend yield. We expect a 9% dividend yield in 2021.”
“The holding company continues to diversify its portfolio in an attempt to be less dependent and correlated with Itaú Unibanco’s results. The recent highlights are the spin-off of XP Inc., the merger of Aegea and the change in the corporate name of Dexco (formerly Duratex) and Copa Energia (formerly Copagaz).
Even with good prospects for the conglomerate’s other businesses, it is unlikely that the bank will not be Itaúsa’s main driver in the coming years, due to the difference in business strength.
Despite this, we have seen results above expectations for Itaú, which is able to deliver high levels of profitability even in a pandemic scenario. However, the evolution of the discount between the market value of Itaúsa and the market value of the sum of its parts caught our attention.
As we believe that the share is discounted in relation to its real market value and Itaúsa is a good dividend payer (average payout of 64% in the last 5 years and 6% dividend yield expected for 2021), we are betting on its shares for the dividend portfolio”.
“Engie is a company focused on electricity generation, but also with interests in distribution and natural gas. Since privatization it has been an excellent dividend payer as well as an excellent capital allocator, entering into unusual projects with a high rate of return and having consistent success.
In addition to the good prospects associated with recent initiatives in the gas and wind energy market, we recommend the action in this portfolio especially due to the recurring earnings that the company pays to shareholders”.
Comment: BTG Actual
“Copel’s 4,756 MW of capacity generate more than enough energy to meet retail demand, so the company currently sells the surplus to the Brazilian interconnected system.
Currently, the dividend policy is a 65% payout if leverage is below 1.5x net debt/Ebitda, and everything indicates that it will be below. Copel is being traded at an implied IRR (Internal Rate of Return) of 9% and an estimated dividend yield for 2021 is 11%”.
Comment: XP Investments
“During the month of October, the shares performed better than the Ibovespa index. We believe that the move can be justified due to the defensive perception that the transmission segment demonstrates in the midst of a challenging macro scenario.
We continue to see no major risks for the maintenance of Isa Cteep’s dividend payment at 75% of regulatory net income, given its comfortable cash position and the resilience of the energy transmission segment. We estimate a dividend yield of 7.6% in 2022”.
São Paulo Energy Company
“Cesp is an energy generating company, currently controlled by the Votorantim group. The company has a very stable cash flow, coming from the hydroelectric plants it operates, especially Porto Primavera.
The controlling group has just proposed a merger of Cesp with all its generation assets, which could make the company double in size.
In addition to the stable cash flow, the company also has a number of very important legal assets and liabilities, and we believe that this component is priced too conservatively.”
Comment: Investments Guide
“The company has a complete portfolio of telecom services for individuals, in addition to corporate solutions for companies of all sizes.
Vivo is awaiting the decision of Cade (Administrative Council for Economic Defense) and Anatel (National Telecommunications Agency) on the acquisition of Oi Móvel together with Claro and TIM.
In the second quarter, the company reported growth in its core units, driven by the growth in the number of mobile and FTTH customers. The Ebitda margin in the quarter was above consensus, with the exclusion of ICMS from the PIS/Cofins and contingencies calculation basis.
We see the company’s shares being traded at an attractive multiple, when compared to its historical average, and still having a robust dividend yield”.
“We view the investment in Petrobras with optimism. We believe the stock is heavily discounted from the target price we found in our model. However, it is important to emphasize that Petrobras’ investment thesis has several risks.
Our base scenario is to maintain the three pillars that support the thesis: focus on the E&P segment in the Pre-Salt; sale of non-essential assets; maintenance of the fuel price policy.
The third quarter was marked by the continuity of the company’s strategy, in particular the reduction of gross debt, which exceeded the target and unlocked a dividend distribution of more than R$ 2.40 per share.
Furthermore, if we analyze by EV/Ebitda multiple, we see that the company is heavily discounted from its historical average, practically at the same level seen during the market crash in the Covid crash in 2020. For this year, we expect dividend yield of 9%”.
Reference: CNN Brasil