Shutterstock photo
Markets

Sasol Ltd. is based in South Africa with global operations and a world class dividend (SSOL & XOM)

Shutterstock photo

Shutterstock photo

Major oil and chemical companies from emerging market nations should be a part of all investment portfolios and Sasol Ltd ( SSL , quote ) is an excellent choice due to its strong fundamentals, wide product base and healthy dividend.SSL is headquartered in Johannesburg, South Africa, and, as a result, does not receive much analyst coverage. The last analyst recommendation for the company was in February of 2010.

By contrast, there have been nine analyst recommendations for Exxon Mobil ( XOM , quote ) this year. As a result of the lack of analyst coverage, there is a low rate of institutional ownership for Sasol Ltd, less than a tenth that for Exxon Mobil (XOM).

While based in South Africa, Sasol Ltd (SSL) has operations around the globe. The company has many appealing features, ranging from a dividend of about 4% to a low debt load for an oil-driven enterprise. It also mines coal and has a wide range of chemical operations.

The high dividend yield is supported by a very modest payout rate of around 35%, which means there is room for increasing it. Earnings are there to support this: the price-to-earnings ratio is projected to fall to around 8.6 for Sasol Ltd (SSL) over the next year.

Margins and returns are all in double digits and healthy. On a quarter-by-quarter basis, both sales (17.17%) and earnings (26.76%) are up. Like all stocks, the past week has taken the share price of Sasol Ltd lower by almost 8%.

Now around $43, there is an upside to Sasol Ltd (SSL) as it was trading at a year high of around $58.50. Over the last five years, it has been over $60.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos