Hi, I'm Jimmy in this video,
I'm going to walk through my top
three dividend stocks from
the materials sector that
could help give us the passive
income that could help us get
to towards our goal of financial
independence.
Now, since this is a global platform
and diversifying our portfolio
with dividend stocks from other
countries could be helpful
to almost all of our portfolios.
Well, I thought it makes sense to
include three dividend stocks from
the US and three dividend stocks
from Europe to help get more
opportunity or more options in there
for each of us to go out and
research.
Now, this video is part of a new
passive income from dividend series
where we're putting together the top
three dividend stocks from each
of the 11 Global Investment
Classification Standards.
This video focuses on the material
sector and then we're gonna go right
down the line cover in each of them.
Now, in this particular video, like
I mentioned, we're testing out
adding three European stocks.
Let me know in the comments below if
you think that's a good idea.
Should we go further with that or
just leave it with us stocks?
Please let me know what you think of
the comments below.
OK. So to make this list,
obviously we want to stocks that
paid good dividends, ideally
dividends that have the potential to
grow or at least be maintained
over the next couple of years.
And I also look for companies
that could continue to afford
to pay their dividend.
And for that, what we used
was the dividend coverage ratio.
A dividend coverage ratio is when
we take the profits of the company
and we compare that to the to
the amount of dividends that that
company paid.
The more the company earned relative
to the amount of dividends that they
paid while the higher the dividend
coverage ratio, clearly the higher
is better. So we made sure that
companies looked like they can
afford to continue to pay their
dividends.
Okay. Let's jump in with the first
dividend paying stock.
Our first US company is the
International Flavors and Fragrances
Company ticker symbol IFF.
Basically what they do is they
create, manufacture and supply
flavors and fragrances
for food,
beverages, personal care products,
household products, things along
those lines.
Their products are used in things
like perfume, soaps, some
food, some beverages and a long
list of products.
But I'm sure we'll get the point of
basically what they do.
They provide the fragrances and the
flavors to companies to manufacture
their products.
Now, I like IFF because
it seems that they have some
defensive nature
to their business, which could
ultimately be quite useful if we're
worried at all about a stock market
crash.
Plus, when we look at their
dividend, well, we can see that
dividends have grown nicely
over the past few years and as
we could see with analyst estimates.
Those are the green bars.
Well, it seems that dividends are
expected to continue to grow
over the next couple of years,
according to analysts.
Right now, their dividend yield is
just short of two and a half
percent.
Now, when we add earnings per share
to this chart, that's the orange
lines. Well, clearly, earnings per
share is much larger than the blue
bars, which is dividends.
So clearly they look somewhat
capable of paying their dividends,
using nothing more than just the
profits that they're currently
earning. So that's a good thing
for almost any dividend stock.
Now, I also want to point out that
here I use adjusted earnings per
share. Adjusted earnings per share
can be much more useful than
stated numbers because adjusted
numbers either add back or take
away certain profit
or expenses.
Maybe they sold a piece of real
estate or in the case of this
company, they had fees from
an acquisition that
that they had made last year.
Well, since that was true and
clearly those numbers are outside
the normal course of business,
unless they make a new acquisition,
those fees won't exist.
So you add back those fees, you end
up with a higher earnings per share.
If they had sold real estate and
look like a profit, you would deduct
that either way.
That's what we have there. That's
all we're using through throughout
all of the charts that we're using
adjusted earnings per share.
Okay. Our next company jumps over
the London Stock Exchange and it's
a company called Johnson Matthew
Ticker Symbol JMAT.
JMAT
is one of the leaders in
the refining and distribution
of the gold, silver and platinum
metal groups among a whole host
of other things that they're pushing
for now.
They've been around since the early
eighteen hundreds.
And as we could see with their
dividend chart, clearly they've
been fairly consistent.
And when we jump in and add earnings
per share to this chart, well here,
just like all the other companies on
this list, it seems that Johnson is
doing a nice job of covering their
distributions.
So it seems that they're two and a
half percent or so dividend yield
is quite safe.
We'll come back to them in a second.
But for now, let's jump over to the
third company on the list.
Back to the U.S.
and that's this, the dividend stock
that has a slightly higher dividend
yield. Up next, we have
Lyondellbasell Industries ticker
symbol, LYB.
LYB has a dividend yield of almost
four and a half percent.
And what they do is they manufacture
plastic, chemical and fuel
products. And like I said, they have
a. Great dividend right now.
And when we look at their dividend
per share chart.
Well, the company, after they drop
their dividends per share back in
2013, well, they've been growing
it fairly nicely ever since then.
And then when we add the earnings
per share to the chart, well, it
makes sense that they would have
lowered the distributions from the
2012 level since back in
2012.
Well, the dividends were getting
relatively high compared to how much
profits they had.
So clearly the drop in dividends
gave them more breathing room.
And I wouldn't be surprised if
they're able to at least maintain
their current dividend growth rate
for the next couple of years.
So I like that one.
OK. Back over the London exchange
for a company called Anglo American
Ticker Symbol AAL.
Now, Anglo American is a global
mining company, which includes
mining for things like iron
ore, copper, nickel.
Things along those lines.
Now, this company is actually
closely tied to
the last London exchange company
that I mentioned, Johnson Matthew.
And because Johnson Matthew
is the sole marketing arm
of Anglo American's platinum
division. Now, we might ask why
include two companies that are so
closely related?
And the real reason I did this is
that this company has a higher
dividend yield at almost it's about
four point four percent compared to
Johnson's two point four percent.
So I know we're thinking
if Anglo has a higher dividend
yield, why include the other one at
all? Well, for that we have
a AAL's dividend chart.
And as we could see, it's been a
bit less consistent than all the
other companies that we've looked at
so far. And going forward
now, when we add earnings per share
to this chart, we can see that
the volatility of their profits or
their earnings is closely tied
to the volatility of their
dividends.
But ultimately, I actually like this
business because I think that this
business should do fairly well over
the next couple of years.
And I think that Anglo has the
possibility of meeting or
at least following closely in line
with what analysts are estimating on
both the profit and on the dividend
side. And if that happens?
Well, it seems that their dividend
is likely safe over the next few
years and the four point four
percent could add a nice diversified
to our whole portfolio.
Okay. Skipping back to the next U.S.
stock here, we have Eastman
Chemical Ticker symbol
EMN now Eastman Chemicals
and International Chemical Company
that produces fibers, plastics
and chemicals.
They have a dividend yield of about
3 percent.
And when we pull up their dividend
per share chart, well, we can see
clearly they've been growing quite
nicely over the past few years
and we mix in earnings per share
into this whole thing.
What we can see that their 3
percent dividend yield seems quite
safe. In fact, I could easily
see them ramping up the pace
that they're increasing their
dividends by.
So with that in mind, I think that
this seems like a fairly stable
dividend stock.
Okay. Now we have one of the more
dynamic companies from
a trading perspective on our
list, and that's Rio Tinto
ticker symbol RIO.
Now, Rio Tinto is available on the
London Stock Exchange.
It's also available in the US under
the same ticker.
And Rio Tinto Ltd
is listed in Australia as well.
So we can get this company from a
whole different angles.
Now, in London, Rio
has a dividend yield of about six
point three percent in the US
to have a dividend yield of about
five point seven.
And in Australia, it's slightly over
7 percent.
So clearly it pays a good dividend.
So Rio is an international mining
company and they have interests
in mines that mine everything
from aluminum, coal,
copper, gold, iron ore,
diamonds, uranium,
silver, zinc.
And the list goes on and on.
So this is what their dividends look
like going back to 2012.
And here I'm focusing on the London
stock or the other stock
exchanges. They look similar.
Neither one is there's no particular
exchange that was significantly
better or worse.
So when we add earnings per share,
well, broadly speaking,
it seems that Rio Tinto has done a
good job of covering their dividends
outside of the one year.
But going forward, I would expect
for them to continue to at least
maintain their dividend.
So once again, this is one of those
high dividend stocks that could make
a good addition to most dividend
portfolios.
Now, if you're interested in more
high dividend stocks, real estate
investment trusts or rates
for short, well, they can be a great
place for many of us to start.
So if you're interested in learning
more about rates and she did a great
primer video and that could
be a great next video for you to
watch. There's a link in the
description below and you can link
right here. So feel free to check
that out if that's interesting to
you. Besides that.
Thank you so much for stick with me
all the way to the end of the video.
I really appreciate it.
And we're gonna do more dividend
stocks for all the other sectors
coming up soon.
So don't forget, hit the subscribe
button, hit the thumbs up.
Thanks for sticking with me.
I'll see you in the next video.