Hidden Gems: 3 Overlooked Dividend Stocks in Emerging Markets

  • Overlooked dividend stocks in emerging markets offering growth and income.
  • Alliance Resource Partners (ARLP): Diverse energy company with coal, oil, gas, and Bitcoin mining operations.
  • Vinci Partners Investments (VINP): Brazilian alternative investment firm expanding through acquisitions.
  • Ambev S.A. (ABEV): Major Latin American beverage company with strong brand portfolio and distribution.
emerging markets dividend stocks - Hidden Gems: 3 Overlooked Dividend Stocks in Emerging Markets

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Adding emerging markets dividend stocks into your investment portfolio could enable very nice growth and good dividends. Besides, these new markets have recently achieved industrialization, and are developing at a fast pace. These create conditions for obtaining unique opportunities, which are not considered within the framework of developed markets. I then think that the companies on this list are long-term winners.

It is a known fact that emerging markets are generally capable of attaining higher growth rates than the markets. Indian, Brazilian, and Mexican Mexican economies are projected to grow at fast rates given the ongoing industrialization and urbanization trends as well as rising consumerism. This growth represents the possibility of higher returns to investors.

What’s best is that many of these emerging markets dividend stocks show value characteristics as well. I think these companies are in a good position to provide capital appreciation as well as income generation for investors who invest in them early.

So here are three emerging markets dividend stocks for investors to consider.

Alliance Resource Partners (ARLP)

A magnifying glass zooms in on the logo for Alliance Resource Partners, L.P. (ARLP)
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Alliance Resource Partners LP (NASDAQ:ARLP) is a diverse energy company engaged in coal mining, oil and gas royalty, data centers, and Bitcoin (BTC-USD) mining. It’s one of those emerging markets dividend stocks through its presence in Colombia.

In the current energy scenario, Alliance Resource Partners is a good opportunity for investment. Even though the coal industry is under pressure, ARLP’s low-cost structure and its strategic profile make it a rather robust company. This has been because the company has diversified into oil & gas royalties to counter-check volatility in the coal market. 

Also, the company’s emphasis on having long-term contracts adds to its stability, and the exploration of Bitcoin mining and possible data center business by ARLP proves the company’s ability to shift in line with energy requirements. 

ARLP has a very substantial dividend yield of 11.36% and a dividend growth rate of 7.69%. I think it’s suitable for long-term investment.

Vinci Partners Investments (VINP)

The Brazilian flag with the sun in the background
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Vinci Partners Investments (NASDAQ:VINP) is an alternative investment management firm based in Brazil, which comprises private equity, real estate, and infrastructure.

The company’s sound financials, reliable dividends, and smart acquisitions such as MAV Capital only add to the company’s attractiveness. This is especially imperative as Brazil’s financial markets mature and the populace seeks out new investment opportunities; as such, Vinci Partners is poised to create value for its shareholders in the long-term. 

The acquisition of MAV Capital by Vinci illustrates the firm’s growth strategy of moving into unfilled niches, especially in the Brazilian agricultural business. At the same time, the firm’s product development strategies and diversification into Bitcoin mining and potential data center business demonstrate the firm’s nimbleness. 

VINP has a dividend yield of 5.90%. It also has a solid growth rate of 5.71%. This is in addition to the short-term capital appreciation it has provided investors, with its stock price soaring 11.51% over the past year.

Ambev S.A. (ABEV)

website image for ambev
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Ambev S.A. (NYSE:ABEV) is one of the major beverage companies in the Latin American region with well-established brands in beer, soft drinks, and other beverages. 

These initiatives, especially in the area of premiumization and innovation, especially in the zero sugar segment, Ambev is experiencing the most growth from and margin expansion. The company’s brand portfolio such as Corona, Budweiser, and Guarana have maintained market share and consumer preferences.

Despite the problems with the taxes in Brazil and the economy in Argentina, Ambev reported strong operational performance and cash flow. BEES and Ze Delivery are distribution technologies that the company has strategically invested in, thus improving its competitiveness. 

Having a sound balance sheet, a good dividend policy, and the opportunity to gain market share in the improving Latin American economies, Ambev is a good long-term stock for investors. ABEV has a great dividend yield of 7.16% along with a dividend growth rate of 4.63%. This then makes it one of those emerging markets dividend stocks.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.


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