High Dividend Stocks — Huntsman (HUN)
Market Cap: $5.7 billion
Dividend Yield: 2.1%
Sure, the current dividend yield of 2.1% for Huntsman (HUN) isn’t super impressive, especially compared to other dividend stocks on this list. But that dividend is just 22% of projected 2014 earnings and ripe for big increases.
The stock is a rather boring chemicals player, focusing on dyes and polyurethanes among other things. It’s a fraction of the size of larger peers DuPont (DD), 3M (MMM) and Dow Chemical (DOW) but also happens to be a better value based on future earnings; the forward price-to-earnings ratio of Huntsman is about 9.1 right now vs. 14 or higher for these large-cap chemical companies.
After basically flat revenue in 2013, the forecast for 2014 at Huntsman indicates 6% revenue growth — which isn’t killer, but IS higher than Dow or DuPont. Furthermore, 2014 profits are set to jump an impressive 15% to 20% over last year, according to analysts.
Huntsman was hit hard by the Great Recession, failing to turn a profit in both 2009 and 2010. And there is a risk that as a much smaller player in the chemical space, a downturn could hit Huntsman stock harder than its larger peers.
But the flip side is equally true. If and when the economy turns around, Huntsman may see outsized growth — both in share price and in its dividend. It also could be a buyout target as the big chemical players look to increase their reach in the years ahead.