The Quest for High Dividend Stocks: Unveiling the Appeal of ENEL CHILE SA (ENIC) on the NYSE - A Hidden Gem in the Global South

Let's delve into the ADR market figures.

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Here, we present an unusual comparison focusing on "ADRs with similar trading volumes." We've juxtaposed SONY, from an entirely different sector, for a unique perspective.

Data as of Feb 3, 2024.

■ADR
market	ticker	Price	eps	pe	volume	marketcap	volumeavg	change	shares
NYSE:	ENIC	2.84	1.07	2.66	462165	3997396439	715946	-0.11	1383331200
NYSE:	SONY	98.56	7.81	13.57	405812	18256333200000	710006	-0.33	1261059000

ENIC:

Attractive for its low PE ratio and stable market value. Affordable acquisition with potential for growth as a mid-sized company. The narrow range of 52-week highs and lows indicates price stability, suitable for investors seeking to minimize risk.

ADR Market Trends and Rising Interest in High Dividend Stocks:

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With the launch of the new NISA in Japan, an increase in individual investors is expected, leading to growing interest in individual stocks. X (formerly Twitter) highlighted high-dividend energy sector stocks like PBR, EC during the US interest rate hikes. Shipping stocks like ZIM have navigated from high dividends to no dividends, underlining geopolitical risks and political situations, yet a strong comeback is anticipated. Continued exploration and selection of global stocks available through ADRs are planned.

Why ENEL was chosen:

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Petrobras (PBR) and Ecopetrol S.A. (EC) are well-known, hence the focus on another stock. Rakuten Securities offers "related stocks" based on viewing habits, where "Enel Chile S.A. (ENIC)" caught attention. A simple yet powerful marketing method, but curiosity is always key.

The Light of the Global South: Overview of ENEL

Basic Information and Main Operations:

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Enel Chile SA, based in Chile, engages in generation, transmission, and distribution of electricity through its subsidiaries.
Segments include Generation, Distribution, and other business activities.
Enel X Chile aims to open energy to new uses, technologies, organizations, and services.
Includes e-City, e-Home, e-Industries, and e-Mobility.

Potential of the South American Market and ENIC's Role:

Chile's economic situation shows a rise in real GDP growth and internal demand in the third quarter of 2023. ENEL CHILE SA plays a key role in the renewable energy market, expected to grow over 9% CAGR. Source: Mordor Intelligence

The Secret Behind High Dividends and Financial Health:

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Analysis of Dividend Policy and Sustainability: Notable for its high dividends. Dividend Dates and Amounts: June 08, 2023: $0.315653 per share May 18, 2023: $0.315653 per share January 19, 2023: $0.020616 per share ENIC's Financial Metrics (EPS, PBR, etc.) and Market Evaluation: Attractive for its undervaluation (especially PBR), financial stability (BPS, equity ratio), and profitability (ROE, ROA). However, the extremely high forecasted PER indicates uncertainty in future earnings, necessitating careful analysis. Market volatility reflected in the beta value should also be considered.

Undervaluation:

Actual and Forecasted PER: The actual PER is 3.00x, while the forecasted PER is extremely high at 676.16x, indicating market concerns about future earnings. Actual and Forecasted PBR: The actual PBR is 0.92x, forecasted PBR is 0.05x, suggesting stock is undervalued compared to net asset value.

Stability:

Actual and Forecasted BPS: The actual BPS is $2,961.84, forecasted BPS is $54,039.15, indicating strong financial stability. Equity Ratio: 34.53%, indicating a relatively sound financial structure. Current Ratio: 96.71%, showing high short-term payment capability.

Growth & Profitability:

5-Year EPS Growth Rate: 20.53%, indicating stable profit per share growth over the past five years. Operating Margin: 38.20%, high operating margin indicates efficient management and high profitability.

ROE and ROA:

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30.56% and 10.55% respectively, high figures indicating high profitability against capital and assets.

Performance:

The performance has been rebounding since Q2 of 2023.

Realities in South America and Challenging Preconceptions:

Political Risks and Realistic Assessments:

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South American countries mostly adopt presidential systems with multiple political parties, showing political diversity. Recent political trends include Lula's reelection in Brazil in 2022 and Castillo's impeachment in Peru in 2023, with Carlos Alvarado's presidency expected to stabilize political turmoil in Peru. Chile's political landscape, under the Boric administration and new constitutional processes, is set for major changes. Investors need to be aware of political risks such as intensifying political conflicts under the Boric administration, chaos during the new constitution process, and its economic impact. These political risks can lead to increased risk-averse behavior among investors, deteriorating business environments, and capital outflows. Investment decisions should be based on a thorough understanding of these political risks. This article is for analysis purposes and does not recommend individual stocks. Investing is at your own risk.