Marine Harvest: Fat Dividend from Healthy Seafood
02/24/2017 8:00 am EST
The company supplies more than 420,000 tons of salmon to more than 70 markets worldwide, satisfying one-fifth of global demand.
Marine Harvest provides everything from fillets and steaks to ready-to-eat products like smoked salmon and portioned fish.
Salmon, of course, is one of the world’s healthiest foods. It is an excellent source of vitamin B12 and vitamin D and rich in protein, potassium and omega-3 fatty acids.
Farmed salmon tends to be less costly than the wild variety -- and global demand is on the rise. Marine Harvest runs fisheries in Europe, Asia, Canada and South America, and handles its own processing, packaging and shipping.
The company is also zeroing in on Japan’s lucrative sushi market with a premium fish, called Mowi salmon, that it also cultivates.
Marine Harvest has been around for more than half a century. And while there has been plenty of organic growth, it also has benefited from various mergers and acquisitions along the way.
The numbers here are excellent. In the most recent quarter, earnings soared 131% on a 16% increase in revenue. The company’s operating margin is 27%. And management is earning a healthy 27% return on equity.
Over the last 12 months, total sales topped $3.7 billion. Expect profits to rise another 65% in 2017. That means the current dividend -- already substantial at 7.75% -- should increase further.
This is a recession-resistant company with excellent management, a fat dividend and plenty of upside potential. So pick up Marine Harvest and place a sell stop at $14.25.