We recently published a list of Why Are These 10 Dividend Stocks Declining? In this article, we are going to take a look at where Bunge Global SA (NYSE:BG) stands against other declining dividend stocks.
The dividend season is here, and the big announcements are rolling in!
The overall market atmosphere has been moderately negative since the new tariffs from the US. Soon after he entered the Oval Office, President Donald Trump announced a 25 percent tariff on imported goods from Canada and Mexico. Chinese products, meanwhile, are left tackling an even higher tariff of 60 percent.
As a result, on Monday this week, the broader market noted a sharp decline of 0.76 percent, while the Nasdaq reported the same trajectory but at 1.20 percent.
Regardless of market conditions, investors have consistently shown interest in dividend stocks, particularly those from companies that have steadily increased their payouts, making them popular among income-focused investors. Analysts have long tracked the performance of Dividend Aristocrats, both historically and in recent times.
In a January 2019 blog post titled “Dividend Growth Strategies and Downside Protection,” Phillip Brzenk, Global Head of Multi-Asset Indexes, examined how dividend growth strategies perform, especially during market downturns. He noted that since the end of 1989, there have been six calendar years where the broader market delivered negative returns. Interestingly, during each of those years, the Dividend Aristocrats outperformed the broader equity benchmark by an average margin of 13.28%. In addition, in three of those challenging years, they still managed to generate positive total returns. Brzenk further pointed out that when analyzed on a monthly basis, the Dividend Aristocrats outperformed the market 53% of the time, with an average outperformance of 0.16%.
As noted earlier, dividend growth stocks have outperformed the broader market. From its launch in 2005 through September 2023, the Dividend Aristocrats Index delivered a total return of 10.35%, exceeding the broader market’s 9.54% return over the same period. Moreover, these stocks experienced lower volatility, measured at 15.35%, compared to the market’s 16.31%. This suggests that their prices tend to be more stable, making them less susceptible to sharp fluctuations and highlighting their overall resilience.
Our Methodology
In the list of underwhelming performers we will be looking into today, the dividend companies with a minimum of $1 billion in market capitalization alone are considered. Then we checked the returns of these stocks and selected 10 stocks that fell on February 6, 2024. The stocks are ranked according to their dividend yields, as of February 6. We also hedge fund sentiment for each stock, as of Insider Monkey’s database of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Aerial view of an orchard of different fruits, representing the abundance of the agribusiness.
Bunge Global SA (NYSE:BG)
Annual dividend yield: 4.02%
Ex-Dividend Date: February 18, 2025
Number of Hedge Fund Holders: 33
Quarterly dividend amount: $0.68
The stock price of Bunge Global SA (NYSE:BG) declined by over 11% in the last five trading sessions due to their underperformance in quarterly results. The company suffered from poor earnings in its 4th quarter report, where it reported an EPS of $2.13 against the expected $2.30 per share. The adjusted EPS of the company for the fiscal year 2024 declined by over 40% when compared to 2023, highlighting the poor output of the firm. As a result of poor earnings, Citi cut the target price of Bunge Global SA (NYSE:BG) from $86 to $76.
Bunge Global SA (NYSE:BG) remains a strong pick stock among dividend and value investors, as it maintains solid fundamentals and a healthy 34% payout ratio, which is in line with the sector average. With Bunge’s expected acquisition of Viterra in the first quarter of 2025, analysts expect some minor downsides for the stock in the future.
Overall, BG ranks 7th on our list of declining dividend stocks. While we acknowledge the potential for BG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
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