Ken Fisher likes Enersis for its dividends and balance sheet
While October was the best month for the stock market in years, both the Dow and Standard & Poor’s 500 Index are flat for the past decade making dividend-paying Latin American stocks such as YPF SA (YPF, quote), Brasil Telecom (BTM, quote) and Enersis SA (ENI, quote) even more attractive.
Headquartered in Santiago, Chile, Enersis is the largest private generator of electricity in Latin America.
According to Ken Fisher in an article in Forbes, “Find Stocks Like Tim, Tim and Timken,” it is a “reasonably priced way to play Latin America’s growth.”
Enersis is held in exchangetraded funds such as Claymore Frontier Markets (FRN, quote).
Increasing the appeal are very solid and stable financials. The price-to-sales ratio is just 0.98. All of the returns and all of the margins are healthy. The forward price-to-earnings ratio is 11.88.
The dividend is equally attractive in its strength and stability. At 3.89%, it is much higher than the average of around 2% for a stock on the Standard & Poor’s 500 Index. In addition, it is very sustainable, as the payout ratio is well under 40%.
When Fisher was touting Enersis earlier this year in Forbes, it was trading around $24 a share. Now it is about $19.70. The mean analyst target price for Enersis over the next year is $30.27.
This is the same stock Fisher recommended, only trading at a substantial discount with the same upside.