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