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Analysis: Marine Harvest (MHG)

Utilities have begun recovering, providing appreciation and income, and recent payouts from this growing fish farmer have been lucrative for shareholders. from Global Income Edge Farm-raised fish is a booming business, and, as the largest fish-farming business in the world, Marine Harvest (MHG) is riding the wave. Almost half the seafood eaten...

Utilities have begun recovering, providing appreciation and income, and recent payouts from this growing fish farmer have been lucrative for shareholders.

from Global Income Edge

Farm-raised fish is a booming business, and, as the largest fish-farming business in the world, Marine Harvest (MHG) is riding the wave. Almost half the seafood eaten worldwide today is farm-raised, as opposed to caught in the wild, and the percentage of farm-raised seafood is expected to hit 62% in the next 15 years, according to the World Bank.

Salmon is behind only tuna as the most-consumed fish, and one in five Atlantic salmon eaten worldwide comes from Marine Harvest. The company has fish farms in Norway, Canada, Chile, Scotland, Ireland and the Faroe Islands (halfway between Norway and Iceland).

Its dividend is irregular, and its policy is that as long as its debt is less than half of its equity, it will pay at least 75% of free cash flow, after certain expenses, as dividends.

So, in 2010, it paid three dividends amounting to 94 cents; in 2011, it paid one dividend of $1.45; in 2012, shareholders did without; and last year, it paid three dividends totaling 37 cents. This year, though, the company has paid two dividends so far of $1.03 per share.

Although it didn’t make a profit in its second quarter, it posted record sales and cash flow, and it is paying a 17-cent dividend later this month. The stock price has risen on a fairly steady track the last three years, from about $5.30 a share to $13.65 a share.

With its fat, if irregular, dividends and dominance in a rapidly growing industry, Marine Harvest is a buy up to $16 a share.

Benjamin Shepherd, Global Income Edge, www.investingdaily.com/global-income-edge, 800-832-2330, September 2014

Benjamin Shepherd is a recognized exchange traded fund (ETF), mutual fund and stock expert with an extensive background analyzing time-tested funds, their management and investment strategies which have proven themselves in both bull and bear markets. Ben is editor of Global Investment Strategist, which examines top-performing investments in Brazil, Russia, India, China, Japan, Indonesia, South Korea, and other rising economic powers. He’s also editor of Benjamin Shepherd’s Wall Street, born from his years learning from famed investment guru Louis Rukeyser and subsequently serving as editor of Louis Rukeyser’s Wall Street and Louis Rukeyser’s Mutual Funds.