Just as you can’t spell “stocking stuffer” without “stock,” it’s not a good idea to look for riches this time of year without help. Enter three wise men — investment experts, that is — who…
Just as you can’t spell “stocking stuffer” without “stock,” it’s not a good idea to look for riches this time of year without help. Enter three wise men — investment experts, that is — who come bearing gifts from afar, at least in the case of one stock based in Turkey.
Granted, Turkcell might sound like the name of a lost Bruce Willis jailbreak film. The telecom isn’t exactly a household name, especially when you call it by its full moniker: Turkcell Iletisim Hizmetleri. But if one universal language translates across pretty much every international boundary, it’s money. And in the case of one pundit, this company ranks as a strong buy.
Based on his own fundamental rankings, “Turkcell rises above most other telecom companies, with top-tiered scores in growth, value and yield,” says Owen Williams, a portfolio manager for Boston-based Interactive Brokers Asset Management and founder of Williams Market Analytics.
Growth, value and yield: three gifts for the holidays to outrank a bag of myrrh, whatever that is. Turkcell is one of three dividend-yielding stocks that experts recommend for the month of December. Here’s a closer look at the telecom and two other companies income investors may consider.
As it trades on the New York Stock Exchange, Turkcell is a known quantity to those who follow telecom stocks. “Investors looking to add a telecom to their portfolios are well-advised to consider it,” Williams says.
With most overseas companies, share performance must weigh out against domestic factors; think of how the ongoing news surrounding Brexit will affect British stocks, for example. Indeed, Turkcell has braved strong headwinds related to August’s economic crisis in its native country. Between January and August, the Turkish lira swan dived roughly 90 percent.
But with those sickening conditions fading into the rear view, the result is a boon for U.S. investors: “an extremely undervalued and attractive lira,” Williams says. “In other words, dollar-based investors in Turkcell have an enormous potential tailwind from the currency.”
Better a currency play than a dividend play, as Turkcell’s payouts have bounced around like a ping-pong ball in recent quarters. But that could stabilize should investors see the benefits of a full lira recovery — which, over the next few years, could mean tremendous returns with an upside passing 75 percent. Already, since the trough of the Turkish economic crisis in September, its share price is up 38 percent to $5.50.
Still none of this matters much if Turkcell itself isn’t a strong company. Williams believes it is, based on numerous factors. For starters, it does business in eight countries (including Germany and Ukraine). It has also innovated in the race to 5G, working in conjunction with universities and tech companies.
“While I don’t think of Turkey as a cutting-edge technology country, Turkcell has in fact established the fastest mobile network of the world, today in Istanbul,” Williams says. “This should eventually translate into sales and bottom-line revenue.”
UnitedHealth is the classic ladder-climbing stock, with nothing stopping its upward momentum over the last five years. If you bought the stock in late 2013, you paid $73 per share. Today, UNH is worth $271, nearly four times that original worth.
The dividend news is no less peachy. In June, shares rallied after UNH raised its quarterly dividend from 75 to 90 cents per share, posting a new yield of 1.47 percent.
Thus it’s no surprise that San Diego-based Blockforce Capital rates UnitedHealth as a dividend champ. UNH is one of several stocks to receive the highest possible score from Blockforce’s dividend health-rating system, which assesses the likelihood that companies will grow or cut payouts in the next 12 months.
“UNH has lots of levered free cash flow to support future dividend growth and very strong earnings growth,” says Kian Salehizadeh, senior analyst at Blockforce. “Its five-year annualized dividend growth rate of 27 percent is solid.”
Wall Street analysts are no less boisterous in their assessment. Of the 16 firms weighing in, 14 call UnitedHealth a “strong buy,” which is about as good as it gets in terms of recommendations. Though by no means tepid, the other two merely rate it a “buy.”
Salehizadeh says analyst enthusiasm stems in large part from “an abundance of organic and inorganic growth opportunities over the next several years.”
Findlay, Ohio, population 41,000 and change, is about as far from the high-flying action of Wall Street as you can get. But as the headquarters of this energy logistics company, it has potential bragging rights to an energy sector comeback kid.
It’s crucial to note that overall, the strongest of energy stocks have been beaten silly over the last 12 months. Following a similar trajectory to giants such as Suncor Energy ( SU), MPLX has spent the last year riding out rollercoaster dips to a fairly flat share price (down 3.5 percent to about $34 per share).
Yet when energy stocks finally recover, MPLX stands poised to lead the way. A subsidiary of Marathon Oil Corp. ( MRO), its various high-quality and cash-rich assets run the gamut from 10,000 miles of crude and refined products pipelines to 8.7 billion cubic feet per day of natural gas processing capacity, says K.C. Ma, director of the George Investments Institute at Stetson University in DeLand, Florida.
That in essence places MPLX at the heart of expansion needs for North America’s energy infrastructure. Exciting? Perhaps not. Staring at bulky pipes pales in comparison to watching a gleaming Tesla ( TSLA) roll off the assembly line.
“But for such a boring company, MPLX has the most exciting dividend payout history,” Ma says. “They have a 7.7 percent current dividend yield versus the S&P’s 1.9 percent, and the annual payout growth is expected to be between 6 and 8 percent, versus the S&P’s 6.4 percent.”