Natural Health Trends Corp: Lots of Cash, No Debt, & a Bullish Stock
Natural Health Trends Corp. (NASDAQ:NHTC) is an overlooked retail stock I’ve been following for a few years now. Unfortunately, this reliable, ultra-high-yield dividend stock doesn’t garner a lot of attention. That might be because the company operates as a direct-selling and e-commerce company.
Most people know of direct selling under a different name: multi-level marketing (MLM). Unfortunately, MLM companies often get a bad rap. But the fact remains, MLM businesses are hugely popular and make a lot of money.
According to a recent study, the global MLM industry was worth $201.0 billion in 2022 and is projected to hit $329.0 billion by the end of 2030. (Source: “MLM Market Size, Share, Trends, Growth 2030,” Zion Market Research, October 27, 2023.)
A few of the bigger MLM companies are Amway Corp., Herbalife Ltd (NYSE:HLF), Mary Kay Inc., and Nu Skin Enterprises, Inc. (NYSE:NUS).
With a market cap of just $70.8 million, Natural Health Trends Corp. is one of the lesser-known global MLM companies—but it’s also one of the most successful.
The company continues to report solid financial results. On its balance sheet, it has more than $58.0 million in cash and zero debt. Moreover, NHTC stock ripped 96% higher in 2023 and pays reliable, high-yield dividends.
It’s tough to beat that combination.
Natural Health Trends Corp. markets and sells personal care, wellness, and “quality of life” products under the “NHT Global” brand in nearly 50 countries around the world, including the U.S., Canada, Mexico, China, Australia, Japan, France, Germany, Italy, Russia, Spain, Sweden, and the U.K. (Source: “Corporate Fact Sheet: November 2022,” Natural Health Trends Corp., last accessed January 22, 2024.)
The company’s global footprint is always growing, and it has long-term expansion opportunities in Southeast Asia, the Americas, and Europe.
Natural Health Trends Corp.’s products include nutritional supplements, weight management and energy-enhancing supplements, oral care products, and water filters.
Third-Quarter 2023 Financial Results
For the third quarter ended September 30, 2023, Natural Health Trends announced that its revenues slipped by nine percent year-over-year to $10.6 million. (Source: “Natural Health Trends Reports Third Quarter 2023 Financial Results,” Natural Health Trends Corp., November 1, 2023.)
The decrease in revenues was primarily a result of a year-over-year change in deferred revenues, partly because orders tended to be received later in the third quarter of 2023, compared to the third quarter of 2022. This resulted in an $835,000 unfavorable revenue variance.
Natural Health Trends Corp.’s net income more than tripled to $172,000, or $0.02 per share, from $47,000, or breakeven per share, in the third quarter of 2022. Furthermore, its cash flows from operations improved in the third quarter by $1.4 million.
In the first nine months of 2023, the company’s net income went up by 68% year-over-year to $210,000, or $0.02 per share, from $125,000, or $0.01 per share.
Commenting on the third-quarter results, Chris Sharng, Natural Health Trends Corp.’s president, said, “Adapting to the current environment in which Chinese consumers are reluctant to spend or invest, we managed to generate orders on pace with those of [2022].” (Source: Ibid.)
He added, “Noteworthy to highlight are the signs of momentum extending to several of our other markets including Taiwan, Peru, North America and Japan, each of which delivered strong performance during the quarter.”
NHTC Stock Maintains Quarterly Dividend of $0.20 Per share
In addition to having a healthy balance sheet, Natural Health Trends Corp. has been rewarding its buy-and-hold investors with reliable dividends since 2014. (Source: “NHTC Dividend History,” Nasdaq, last accessed January 22, 2024.)
In November 2023, Natural Health Trends stock paid quarterly cash dividends of $0.20 per share, for a high yield of 13.01% (as of this writing).
Natural Health Trends Corp. also has a history of paying special dividends—10 times so far. (Source: “Corporate Fact Sheet: November 2022,” Natural Health Trends Corp., op. cit.)
NHTC stock’s last special dividend was $0.08 per share in March 2019.
More often than not, a high dividend yield comes with a sagging share price. This isn’t the case with Natural Health Trends stock. As of this writing, NHTC stock is up by:
- 17% over the last three months
- 15% over the last six months
- 65% year-over-year
Chart courtesy of StockCharts.com
The Lowdown on Natural Health Trends Corp.
Natural Health Trends is a relatively small company, but it has a history of providing investors with high-yield dividends. Despite continued headwinds from a stronger U.S. dollar and wavering consumer sentiment, its net income in the third quarter and first nine months of 2023 both experienced significant growth.
Natural Health Trends Corp. continues to report a rock-solid balance sheet and superb business performance in some of its bigger markets, including Taiwan, North America, and Japan.
The company’s momentum should help drive new product launches, an expanded geographic footprint, and digital enhancements. It should also help juice Natural Health Trends stock’s price and support its high-yield dividends.