We recently compiled a list of the 13 Best Foreign Dividend Stocks To Buy According to Analysts. In this article, we are going to take a look at where Vale S.A. (NYSE:VALE) stands against the other foreign dividend stocks.

Dividends have historically been a key driver of investor returns, contributing 85% of the broader market's total return since 1960. In Q3 2024, global dividends hit a record $431.1 billion, despite a drop in special one-off dividends. Underlying dividend growth remains strong at 6.4% for 2024.

Some markets saw major milestones. According to a Janus Henderson report, China, India, and Singapore hit record-high dividends, while the US got a boost from Big Tech firms, which started paying dividends for the first time. In fact, 96% of US companies either increased their payouts or kept them steady. Financials and tech were the biggest growth drivers, while mining and transport lagged behind.

India stood out in a big way, and its dividends surged 27.4% to a record $16.2 billion in Q3. Nearly every company posted double-digit increases, and a whopping 97% of Indian companies in the Janus Henderson index have raised or maintained dividends over the last two years, well above the global average. Japan and Canada also continued their upward trend in the third quarter, with a 6.1% and 6.5% increase in dividends, respectively. On the other hand, Europe’s dividend growth slowed a bit to 3.9%, and the UK saw a 7% drop in dividends, mainly because a few commodity giants slashed payouts to manage debt and weak profits.

The Asia-Pacific region was a mixed bag. Taiwan, Hong Kong, and Australia saw dividend declines in Q3, while Singapore and South Korea posted steady gains. Meanwhile, Brazil’s dividends plunged 42% in Q3, but since Brazilian companies have irregular payout patterns, the drop is not as dramatic as it seems. Elsewhere in emerging markets, Saudi Arabia and Thailand were among the strongest performers in the third quarter. Despite some regional setbacks, the overall outlook for dividends remains positive, with financials and tech leading the charge globally.

For years, international stocks have taken a backseat to the dominance of major US tech companies, but that trend could be shifting. A combination of global factors is making foreign equities more attractive to investors, with the main reason being the recent decline of the US dollar against the euro and other major currencies since last October. Given this, we will take at some of the best foreign dividend stocks.

Our Methodology 

For this article, we used the Finviz stock screener to filter out foreign dividend stocks. Next, we manually searched for the average upside potential of each stock and selected 13 stocks with the highest values. The list below is ranked in ascending order of the upside potential as of February 12. We have also mentioned the dividend yields and hedge fund sentiment as of Q3 2024.

At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)

Aerial view of a giant iron ore mine, showcasing the mineral deposits of the company's Ferrous Minerals segment.

Vale S.A. (NYSE:VALE)

Dividend Yield as of February 12: 10.46%

Number of Hedge Fund Holders: 41

Average Upside Potential: 23.89%

Vale S.A. (NYSE:VALE) is a Brazilian mining company that produces and sells iron ore, iron ore pellets, nickel, and copper globally. Vale is set to invest $12.2 billion to expand its iron ore and copper mining operations at the Carajás complex in northern Brazil. The investment, planned through 2030, will be officially announced at an event with President Luiz Inácio Lula da Silva and his cabinet. Carajás is Vale’s biggest iron ore production hub, churning out 177.5 million metric tons last year, which is more than half of the company’s total output.

Vale S.A. (NYSE:VALE)’s free cash flow for the quarter came in at $0.2 billion, mainly due to lower EBITDA and negative working capital. The company saw a rise in accounts receivable, with 14 million tons of iron ore sales recorded at the end of the quarter and another 23 million tons booked at a forward price of $109 per ton. Capital expenditures held steady at $1.3 billion, staying under the 2024 guidance of $6.5 billion. Despite this, the company focused on returning value to shareholders, paying out $1.6 billion in interest on capital in September 2024. Vale last paid a quarterly dividend of $0.0869 per share on December 12. It is one of the best dividend stocks to invest in.

According to Insider Monkey’s third-quarter database, 41 hedge funds held stakes in Vale S.A. (NYSE:VALE), up from 34 funds in the earlier quarter. Rajiv Jain’s GQG Partners was the biggest position holder in the company, with nearly 18.3 million shares valued at $213.65 million.

Overall VALE ranks 8th on our list of the best foreign dividend stocks to buy according to analysts. While we acknowledge the potential of VALE as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VALE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

 

Disclosure: None. This article is originally published at Insider Monkey.