The market has been increasingly keeping an eye on good companies that pay dividends. After all, investing in stocks that usually have a “fat” distribution of earnings is a smart strategy to make money from the appreciation of the shares and have a recurring extra income.
There are Brazilian companies that are already famous when it comes to dividends. THE Petrobras (PETR4)for example, was featured this year and received the post of largest dividend distributing company in the world in the second quarter of 2022.
But the focus of this text is not on companies that are already part of the portfolio of investors interested in extra income. The objective is to present a company that has the potential to boost its dividends unlocking billions of reais “hidden in the business”, which can fill the shareholder’s pocket.
The share of a specific company, which was recently sold, has a “heavy stake” due to the former controller. But that could change very soon, according to the founding partner of Empiricus ResearchRodolfo Amstalden, and analysts Richard Camargo and Ruy Hungria.
How will this company unlock BRL 100 billion?
Before discovering how you can benefit from the billions of reais that can go into the company’s cash, it is necessary to understand a little bit where that money comes from.
The former controller made a real “damage” to the company’s accounts from 2013 onwards. To have an idea of the loss, in 2013, the annual revenue had a drop of around BRL 6 billion compared to two years earlier – a reduction of around 20%.
As of 2016, the financial situation has improved with some spending cutsbut much remains to be resolved.
Among the values “locked in” at the company, analysts Rodolfo, Ruy and Richard highlight three that could be the key to significantly increasing profits:
- + BRL 5 billion per year revenue only from selling the product at more competitive prices;
- + BRL 87 billion in provisions and contingencies for lingering litigation (if resolved, some of that money could be unlocked);
- + BRL 14 billion in tax credits to be recovered.
For many years, the company marketed its products at about 50% of the market price. With the new controller, it is very likely that this situation will be reversed and the company will start selling at more competitive prices. With this change alone, it would already be possible to have a positive impact of R$ 5 billion in the year for consolidated revenue and Ebitda.
Unlike the improvement in revenue, the other two amounts, R$87 billion and R$14 billion, are not recurring. Even so, if they are unlocked, they can “turbine” the company’s cash.
This action could pay double the dividends expected by the market next year
But in practice, what do these improvements mean for the shareholder’s pocket? The trend is that, with more than R$ 100 billion unlocked in the company’s cash, the company release a “fat” slice of that money to investors.
And analysts have reason to believe this thesis. In 2019, when the company was still in a good financial situation, it even distributed more than 80% of the profit in dividends.
now she only pays the minimum guaranteed by law, 25%but Rodolfo, Richard and Ruy believe that with the financial improvements that are underway, the payout has the potential to increase.
Analysts also estimate that, with the possible significant increase in profit and payout, this company will pay the double the dividend expected by the market.
The three strategists prepared a report that explains the complete thesis of this company that could turn into a big “dairy cow” soon. For them, investing in this action is now the opportunity to get in line to receive a nice slice of the “turbocharged” dividends that will be distributed soon.
The share has already appreciated 45% this year and has become the ‘darling’ of some of the largest financial institutions
In addition to the chance of rich dividends, another highlight of this action is the appreciation. From the beginning of the year until the last closing (22), the asset gave a “jump” of more than 45% and the market believes that the papers can go further.
This action was recommended by Empiricus Research in “Dairy Cows” wallet, led by the aforementioned analysts. the portfolio accumulates high of 184.6% since creationon February 7, 2014, and trusts in the return potential of this company.
But in addition to the analysis house, other financial institutions are also eyeing this action with billions to unlock.
Some of the companies that are betting on this action are the banks Goldman Sachs, UBS, BTG Pactual and Bank of America. And appreciation expectations are not low at all. They vary between 29.3% and 39.7% compared to the last closing price (R$ 47.95, on the 22nd).
So even on the most conservative upside estimate, the stock has the potential to transform:
- BRL 1 thousand in up to BRL 1,365;
- BRL 5 thousand in up to BRL 6,825;
- BRL 15,000 in up to BRL 20,475.
In other words, in addition to joining the line for billion-dollar dividends, anyone who buys this company’s shares can now profit from a very full valuation in a while.
Find out which company has ‘boosted’ dividends in a completely free report
It is likely that this action that has caught the market’s attention has also attracted its interest. After all, not just any company on the Brazilian stock exchange can release BRL 100 billion in cash and share part of this money among the shareholders.
Rodolfo Amstalden, Ruy Hungary and Richard Camargo explained the entire investment thesis of this company with a chance of “turbined” dividends in a full report which shows what this action is, the company’s history and prospects for the future.
This material was initially made available only to subscribers to the “Vacas Leiteiras” portfolio, on the Empiricus Research platform. But now, any investor interested in good dividend-paying stocks can access the report as a courtesy of Empiricus Investimentos brokerage.
The information in this report is the key to getting you in line to receive some of the billionaire value of an off-the-radar company. To get access to free content that can help you earn hefty dividendsjust click the button below and follow the instructions:
Source: Moneytimes
I am a journalist with over 6 years of experience working in the news industry. I currently work as an author for Global Happenings, and my coverage focuses on Technology news. I have written for various publications, including Reuters, The New York Times and The Guardian.
