Natural Health Trends Corp.: 12% Yielder Has Paid 10 Special Dividends
NHTC Stock Is Bullish: Lots of Cash & Zero Debt
Multi-level marketing (MLM) companies often get a bad rap. There are rags-to-riches stories and other stories about cash-strapped members with garages full of unsold products. But the fact remains, MLM companies are hugely popular and make a lot of money. In addition to well-known privately owned MLM companies like The Avon Company and Mary Kay Inc., there are a number of publicly traded MLM companies.
Two of the biggest publicly traded MLM stocks are Herbalife Nutrition Ltd (NYSE:HLF) and Nu Skin Enterprises, Inc. (NYSE:NUS). The former doesn’t provide dividends, and the latter’s dividend is just three percent.
Both companies have lots of cash, but they’re also juggling a lot of debt. Herbalife, with a market cap of $6.1 billion, has $837.0 million in cash and $3.0 billion in debt. Meanwhile, Nu Skin, with a market cap of $2.5 billion, has $379.0 million in cash and $587.0 million in debt.
There’s a better option for income hogs: Natural Health Trends Corp. (NASDAQ:NHTC).
Natural Health Trends is an international MLM and e-commerce company that markets and sells personal care, wellness, and quality-of-life products under the “NHT Global” brand in nearly 50 countries around the world, including in the U.S., Canada, Mexico, China, Japan, Australia, France, Germany, Italy, Russia, Spain, and Sweden. (Source: “Company,” NHT Global, Inc., last accessed September 15, 2021.)
The company’s global footprint is always growing, with additional longer-term expansion opportunities in Southeast Asia, the Americas, and Europe.
Natural Health Trends Corp.’s wellness line includes liquid, encapsulated, tablet, and powder dietary and nutritional supplements, as well as vitamins and minerals. The company’s beauty line includes cleansers, creams, lotions, serums, and toners. Its lifestyle products include weight management and energy-enhancing supplements. Its infant and toddler line includes bath, oral care, hair care, and body care products.
The company also sells home appliances.
Admittedly, with a market cap of $78.8 million, Natural Health Trends is one of the smaller direct-selling companies out there. But it certainly has a healthy balance sheet, with $88.1 million in cash, $72.4 million in working capital, and zero debt. (Source: “Corporate Fact Sheet: August 2021,” Natural Health Trends Corp., last accessed September 15, 2021.)
For the second quarter ended June 30, Natural Health reported its fifth consecutive quarter of positive operating income and net income. It also reported its third consecutive quarter of positive cash flow from operations. (Source: “Natural Health Trends Reports Second Quarter 2021 Financial Results,” Natural Health Trends Corp., August 4, 2021.)
The company’s revenue increased by 20% quarter-over-quarter but slipped by two percent year-over-year to $16.2 million.
Its operating income was up by 92.5% sequentially and 110% year-over-year at $385,000. Its net income was $229,000, or $0.02 per share, versus $153,000, or $0.01 per share, in the first quarter of 2021 and $34,000, or breakeven per share, in the second quarter of 2020.
Natural Health Trends stock rewards its buy-and-hold investors with strong shareholder returns. NHTC stock has paid out regular dividends for the last 27 consecutive quarters and has paid out 10 special dividends. (Source: “NHTC Dividend History,” Nasdaq, last accessed September 15, 2021.)
On August 2, Natural Health Trends Corp.’s board of directors declared a quarterly cash dividend of $0.20 per share, or $0.80 on an annual basis, for a dividend of 12%.
Like many companies, Natural Health Trends’ payout can fluctuate based on what it takes in every quarter. Since it’s involved in direct selling, the company’s revenue is highly correlated with what’s going on economically at the local level.
Despite 2020 being wracked by the coronavirus and ongoing economic challenges, Natural Health Trends stock held its payout at $0.20 per share, which is where it stands today.
In addition to providing high-yield dividends, NHTC stock has been providing share-price gains. As of this writing, Natural Health Trends stock is up by:
- 50% year-to-date
- 46% year-over-year
- 226% since bottoming in March 2020
The Lowdown on Natural Health Trends Corp
Natural Health Trends Corp is a relatively small company, but, as just mentioned, it has a history of providing high-yield dividends and shareholder returns.
The company reported solid second-quarter sequential financial growth despite ongoing macroeconomic challenges. Looking ahead, the easing of pandemic-related restrictions should help the company’s business continue to rebound. That would support NHTC stock’s high-yield dividend.