Top 3 Dividend Stocks for Passive Income – Materials Sector – Dividend Stocks for 2020

Top 3 Dividend Stocks for Passive Income – Materials Sector – Dividend Stocks for 2020


Hi, I’m Jimmy in this video, I’m going to walk through my top three dividend stocks from the materials sector that could help give us the passive income that could help us get to towards our goal of financial independence. Now, since this is a global platform and diversifying our portfolio with dividend stocks from other countries could be helpful to almost all of our portfolios. Well, I thought it makes sense to include three dividend stocks from the US and three dividend stocks from Europe to help get more opportunity or more options in there for each of us to go out and research. Now, this video is part of a new passive income from dividend series where we’re putting together the top three dividend stocks from each of the 11 Global Investment Classification Standards. This video focuses on the material sector and then we’re gonna go right down the line cover in each of them. Now, in this particular video, like I mentioned, we’re testing out adding three European stocks. Let me know in the comments below if you think that’s a good idea. Should we go further with that or just leave it with us stocks? Please let me know what you think of the comments below. OK. So to make this list, obviously we want to stocks that paid good dividends, ideally dividends that have the potential to grow or at least be maintained over the next couple of years. And I also look for companies that could continue to afford to pay their dividend. And for that, what we used was the dividend coverage ratio. A dividend coverage ratio is when we take the profits of the company and we compare that to the to the amount of dividends that that company paid. The more the company earned relative to the amount of dividends that they paid while the higher the dividend coverage ratio, clearly the higher is better. So we made sure that companies looked like they can afford to continue to pay their dividends. Okay. Let’s jump in with the first dividend paying stock. Our first US company is the International Flavors and Fragrances Company ticker symbol IFF. Basically what they do is they create, manufacture and supply flavors and fragrances for food, beverages, personal care products, household products, things along those lines. Their products are used in things like perfume, soaps, some food, some beverages and a long list of products. But I’m sure we’ll get the point of basically what they do. They provide the fragrances and the flavors to companies to manufacture their products. Now, I like IFF because it seems that they have some defensive nature to their business, which could ultimately be quite useful if we’re worried at all about a stock market crash. Plus, when we look at their dividend, well, we can see that dividends have grown nicely over the past few years and as we could see with analyst estimates. Those are the green bars. Well, it seems that dividends are expected to continue to grow over the next couple of years, according to analysts. Right now, their dividend yield is just short of two and a half percent. Now, when we add earnings per share to this chart, that’s the orange lines. Well, clearly, earnings per share is much larger than the blue bars, which is dividends. So clearly they look somewhat capable of paying their dividends, using nothing more than just the profits that they’re currently earning. So that’s a good thing for almost any dividend stock. Now, I also want to point out that here I use adjusted earnings per share. Adjusted earnings per share can be much more useful than stated numbers because adjusted numbers either add back or take away certain profit or expenses. Maybe they sold a piece of real estate or in the case of this company, they had fees from an acquisition that that they had made last year. Well, since that was true and clearly those numbers are outside the normal course of business, unless they make a new acquisition, those fees won’t exist. So you add back those fees, you end up with a higher earnings per share. If they had sold real estate and look like a profit, you would deduct that either way. That’s what we have there. That’s all we’re using through throughout all of the charts that we’re using adjusted earnings per share. Okay. Our next company jumps over the London Stock Exchange and it’s a company called Johnson Matthew Ticker Symbol JMAT. JMAT is one of the leaders in the refining and distribution of the gold, silver and platinum metal groups among a whole host of other things that they’re pushing for now. They’ve been around since the early eighteen hundreds. And as we could see with their dividend chart, clearly they’ve been fairly consistent. And when we jump in and add earnings per share to this chart, well here, just like all the other companies on this list, it seems that Johnson is doing a nice job of covering their distributions. So it seems that they’re two and a half percent or so dividend yield is quite safe. We’ll come back to them in a second. But for now, let’s jump over to the third company on the list. Back to the U.S. and that’s this, the dividend stock that has a slightly higher dividend yield. Up next, we have Lyondellbasell Industries ticker symbol, LYB. LYB has a dividend yield of almost four and a half percent. And what they do is they manufacture plastic, chemical and fuel products. And like I said, they have a. Great dividend right now. And when we look at their dividend per share chart. Well, the company, after they drop their dividends per share back in 2013, well, they’ve been growing it fairly nicely ever since then. And then when we add the earnings per share to the chart, well, it makes sense that they would have lowered the distributions from the 2012 level since back in 2012. Well, the dividends were getting relatively high compared to how much profits they had. So clearly the drop in dividends gave them more breathing room. And I wouldn’t be surprised if they’re able to at least maintain their current dividend growth rate for the next couple of years. So I like that one. OK. Back over the London exchange for a company called Anglo American Ticker Symbol AAL. Now, Anglo American is a global mining company, which includes mining for things like iron ore, copper, nickel. Things along those lines. Now, this company is actually closely tied to the last London exchange company that I mentioned, Johnson Matthew. And because Johnson Matthew is the sole marketing arm of Anglo American’s platinum division. Now, we might ask why include two companies that are so closely related? And the real reason I did this is that this company has a higher dividend yield at almost it’s about four point four percent compared to Johnson’s two point four percent. So I know we’re thinking if Anglo has a higher dividend yield, why include the other one at all? Well, for that we have a AAL’s dividend chart. And as we could see, it’s been a bit less consistent than all the other companies that we’ve looked at so far. And going forward now, when we add earnings per share to this chart, we can see that the volatility of their profits or their earnings is closely tied to the volatility of their dividends. But ultimately, I actually like this business because I think that this business should do fairly well over the next couple of years. And I think that Anglo has the possibility of meeting or at least following closely in line with what analysts are estimating on both the profit and on the dividend side. And if that happens? Well, it seems that their dividend is likely safe over the next few years and the four point four percent could add a nice diversified to our whole portfolio. Okay. Skipping back to the next U.S. stock here, we have Eastman Chemical Ticker symbol EMN now Eastman Chemicals and International Chemical Company that produces fibers, plastics and chemicals. They have a dividend yield of about 3 percent. And when we pull up their dividend per share chart, well, we can see clearly they’ve been growing quite nicely over the past few years and we mix in earnings per share into this whole thing. What we can see that their 3 percent dividend yield seems quite safe. In fact, I could easily see them ramping up the pace that they’re increasing their dividends by. So with that in mind, I think that this seems like a fairly stable dividend stock. Okay. Now we have one of the more dynamic companies from a trading perspective on our list, and that’s Rio Tinto ticker symbol RIO. Now, Rio Tinto is available on the London Stock Exchange. It’s also available in the US under the same ticker. And Rio Tinto Ltd is listed in Australia as well. So we can get this company from a whole different angles. Now, in London, Rio has a dividend yield of about six point three percent in the US to have a dividend yield of about five point seven. And in Australia, it’s slightly over 7 percent. So clearly it pays a good dividend. So Rio is an international mining company and they have interests in mines that mine everything from aluminum, coal, copper, gold, iron ore, diamonds, uranium, silver, zinc. And the list goes on and on. So this is what their dividends look like going back to 2012. And here I’m focusing on the London stock or the other stock exchanges. They look similar. Neither one is there’s no particular exchange that was significantly better or worse. So when we add earnings per share, well, broadly speaking, it seems that Rio Tinto has done a good job of covering their dividends outside of the one year. But going forward, I would expect for them to continue to at least maintain their dividend. So once again, this is one of those high dividend stocks that could make a good addition to most dividend portfolios. Now, if you’re interested in more high dividend stocks, real estate investment trusts or rates for short, well, they can be a great place for many of us to start. So if you’re interested in learning more about rates and she did a great primer video and that could be a great next video for you to watch. There’s a link in the description below and you can link right here. So feel free to check that out if that’s interesting to you. Besides that. Thank you so much for stick with me all the way to the end of the video. I really appreciate it. And we’re gonna do more dividend stocks for all the other sectors coming up soon. So don’t forget, hit the subscribe button, hit the thumbs up. Thanks for sticking with me. I’ll see you in the next video.

79 thoughts on “Top 3 Dividend Stocks for Passive Income – Materials Sector – Dividend Stocks for 2020”

  1. You know what brings me joy? Seeing my dividends coming in.

    John D Rockefeller – most richest man ever lived

  2. Haven’t heard of some of these international stocks, thanks! I love investing in quality dividend companies 🙂

  3. Stock Dividends are my primary focus of my portfolio. I’m been thinking about adding Louis Vuitton as a long term. Can’t find the ticker symbol… is it LVMH or LVMUY LVMHF??? What do you’ll think about this luxury company?

  4. How about Rio Tinto, Jimmy? Their levered free cash flow to market cap ratio is more than 10% while the dividend payout ratio is at 50ish, very comfortable I believe.
    Edit: I wrote the comment before seeing the sixth company hahaha

  5. Hi Jimmy! Do you plan to make video about your portfolio or recommendations on what is good to buy now companies from value and growth perspective? Thank you.

  6. Jimmy you are doing an excellent job of introducing new dividend companies vs recommending the same dividend stocks we here about from every other dividend investor

  7. Jimmy added European stocks…amazing I requested FTSE stock reviews so this is pretty close to that! Awesome! Love your content.

  8. Nice video! I suggest you start to include european stocks in your videos. Germany and France have many world leaders. BASF is a very good example.

  9. Great review on these companies. 👍 There are so many dividend stocks out there since I haven't heard of these.

  10. Getting paid by dividends feels amazing. I'm not working for AT&T or Abbvie but T paid me 30$ and Abbv paid me 64$ this month. If you always exchange time for money you'll never be rich! I'm already making passive income and it will keep growing eventually it will be my retirement. Gotta love dividends thanks for the recommendations some new stocks here and I love researching new compaines! Thanks Jimmy.

  11. You are way too good to be true :)))
    If it was anyone else they would sell these things for a lot of money
    Thanks for supporting your subscribers
    Btw you talk way more comfortable compare to your older videos, so congrats on progress both in content and presentation 😉

  12. I’m a UK investor that subscribed to your channel, to help build a US dividend growth portfolio. That said, I already have a UK dividend portfolio, which churns out monthly cash ready for reinvestment, so now I’m getting the best of both worlds! Keep up the great work,Jimmy! 👍

  13. I’ve never heard someone say Anglo American and Johnson Matthey are related before… very different companies really: AAL is a pure play miner which used to be borderline univestible with Agarwal’s put option, whereas JMAT is a chemicals company

  14. Would also like to add my voice to European stocks Jimmy, not only for myself, but I think you have a growing worldwide audience too. Cheers.

  15. Thank you Jimmy. I like the idea that you decided to include some international stocks. What are the tax implications for international stock dividends and capital gains? I've read that some countries do not charge tax foreign investors on dividends.

  16. These companies suck! Especially that Anglo-American. When a company cuts their dividend, that means it's time to cut the company. If there dividend is not right, then what else is not right? If GE cutting their dividend 2009 wasn't enough of a sign… You get the picture.

  17. yes, another dividend investor for passive income!
    sometimes its hard to convince people the good side of dividend investing for passive income but i guess i will try harder
    you just got a new subscriber..

  18. Very interesting. You dont find a lot of people on youtube talking about the materials sector. My favorite materials stocks are SON and CE.

  19. Good stuff, Im a big fan of Linde Plc $LIN which acquired Praxair and are now I think the largest basic materials company by market cap on any US exchange.

  20. Will you do an update video on aurora cannabis and what it would take for you to feel comfortable investing with them as a spec stock?

  21. Great video, some good picks to explore, i added Rio Tinto after some research, i want more exposure in that sector. keep it up !

  22. Hey Jimmy, can you do a video on leveraged ETFs kinda explaining how they work and why they are bad for long term investing? Their simple charts suggest to me that if you hold them long-term you'd get a return of Yx (Y being the multiplier) but I keep reading different things.

  23. Great video as alway! Warren Buffet just increased his position in
    Occidental Petroleum and it’s paying a dividend of about 8%. What are your thoughts on this company? Should we follow Warren Buffet?

  24. Jimmy, I have a video idea for you. Recently it was revealed Buffet bought shares of OXY and RH. I love your stock analysis videos and am wondering if you could do a breakdown of those companies. Love your videos!

  25. Thank you Jimmy, I really appreciate the effort you put into these videos. I'm glad you're covering some UK stocks, there's some good value on this side of the pond and it helps us shielding from currency fluctuations. Keep up the good work!

  26. Thank you so much for your video! I notice today that the whirlpool has very low PE ratio and pretty high dividend. I am wondering your opinion on it, maybe an analysis on that?

  27. Can you remake the first video with uk stocks as well. As this video was amazing! But for those only investing in the uk stock exchange the first video wasnt helpful sadly.

  28. Hello Jimmy! I see that a lot of people would like to see some European Stocks! I would suggest RTL GROUP (Ticker RRTL) I think it is a great stock for dividend investors! It has a dividend yield of 8% right now

  29. Hi, I'm Italian, and when a dividend is paid to me by an american stock I have to pay taxes in Usa and in Italy too. I think it's the same thing for you in USA for foreign dividends , you should pay a double taxation, one in the foreign country and one in USA.

  30. Euro stocks are a must! Even if the US is strongest, diversification should extend to geography. Most YouTubers ignore the rest of the globe, so thanks!

  31. I don’t worry about current dividend yield as much as the combined dividend yield and 10 year dividend growth rate. My goal is to have a 5% yield within 10 years regardless of current yield. I also look for a 5 year dividend growth rate of at least 5%.

  32. I’m also very hesitant to buy a stock with a dividend payout ratio over 65% unless it’s a REIT. Under 60% preferably.

  33. One other thing I like to look at when vetting a dividend stock is it’s capital appreciation. While capital appreciation is not the goal I believe it’s healthy to have a growth rate of at least 6% per year or 30% over the last 5 years. If the company is growing then my dividend is likely to grow as well.

  34. Just subbed, about to check out some of your other videos! You need more views. Did you ever look at ZMSocial[.]com? I think it would really help you grow your channel!

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