Natural Health Trends Stock: Shares of Overlooked 11.5%-Yielder Up 26% in 2024
July 8, 2024
Outlook for Natural Health Trends Stock Remains Robust
Multi-level marketing companies (MLMs) might get a bad rap, but they’re as American as apple pie. Some are touted as nothing more than a pyramid scheme, but hundreds of millions of people around the world love MLMs because of the potential to make a lot of money. And who doesn’t like the idea of financial freedom?
The income investor who likes the idea of passive income, but doesn’t want to join an MLM and hope family and friends are intrigued by the great business opportunity you have for them, might want to take a look at Natural Health Trends Corp. (NASDAQ:NHTC).
Natural Health Trends is a direct-selling and e-commerce company, or MLM, which we’ve been following for a number of years now. We might be the only ones since there are no analysts tracking Natural Health Trends stock right now.
Regardless, Natural Health Trends stock has been quietly crushing the broader market, up 26% year to date and 44% over the last 12 months. Since the start of 2023, NHTC stock has rallied an impressive 148%. That’s with dividends reinvested. Had a shareholder opted to cash in its quarterly dividends, their returns would slip to 104%.
You probably don’t hear people talking about Natural Health Trends, because its name is a little underwhelming and it’s an MLM company. But investors shouldn’t ignore MLMs or their earnings potential.
The fact is, MLMs are hugely popular and make a lot of money. According to the latest statistics, the global multi-level marketing industry is worth $180.0 billion. (Source: “MLM Market Size, Share, Trends, Growth 2030,” Zion Market Research, October 27, 2023.)
Some of the bigger MLM companies include Herbalife Ltd (NYSE:HLF) and Nu Skin Enterprises, Inc. (NYSE:NUS). The former doesn’t pay a dividend and the latter has a dividend of just 2.3%.
With a market cap of just $80.1 million, Natural Health Trends Corp is one of the smaller, under-the-radar MLMs operating today. It’s a global company, with products available in nearly 50 countries, with offices in North America, China, South Korea, Japan, Russia, and Europe. (Source: “Corporate Fact Sheet,” NHT Global, Inc., last accessed July 2, 2024.)
Here in the U.S., Natural Health Trends sells personal care, wellness, and quality of life products under the “NHT Global” brand.
Strong Sequential Order Growth
For the first quarter ended March 31, 2024, Natural Health reported revenue of $11.0 million, an eight-percent drop from $11.9 million in the first quarter of 2023. (Source: “Natural Health Trends Reports First Quarter 2024 Financial Results,” Natural Health Trends Corp., May 1, 2024.)
The drop in revenue was entirely due to differences in deferred revenue between the two periods. Deferred revenue increased $1.0 million in the first quarter this year, while it remained flat in the comparable period last year.
On top of that, for the first time in six years, Natural Health’s first-quarter orders exceeded the fourth quarter’s, rising 11%. First-quarter orders were also up one percent on an annual basis.
The company’s net income came in at $188,000, or $0.02 per diluted share, compared to $257,000, or $0.02 per diluted share, in the first quarter of 2023. Net cash provided by operating activities was $549,000 in the first three months of 2024, compared to $696,000 in the first three months of 2023.
Commenting on the results, Chris Sharng, Natural Health’s president, said, “Our financial results reflect a $1.0 million increase in deferred revenue which resulted in a revenue decrease when compared to the same period last year. We anticipate the gradual recognition of this deferred revenue in the coming months as we fulfill orders to our customers.”
Quarterly Dividend of $0.20/Share Maintained
Thanks to its healthy balance sheet, Natural Health Trends stock has rewarded buy-and-hold investors with a reliable dividend since 2014. (Source: “Dividend History,” Nasdaq, last accessed July 2, 2024.)
Most recently, in May, the company’s board of directors declared a quarterly cash dividend of $0.20 per share, or $0.80 on an annual basis, for a high-yield dividend of 11.05%.
Natural Health Trends stock also has a history of paying out special dividends, too…nine since 2016. The last special dividend payment was $0.08 per share in February 2019.
More often that not, an ultra-high dividend yield is tied to a depressed share price. That isn’t the case with Natural Health Trends stock though. As of this writing, NHTC stock is up:
- 26% year to date
- 46% year over year
Chart courtesy of StockCharts.com
The Lowdown on Natural Health Trends Stock
Natural Health Trends Corp. is a direct selling company with a history of providing investors with a reliable dividend and special distributions. It continues to have a rock-solid balance sheet, recently reporting that first-quarter orders exceeded those in preceding fourth quarter for the first time in six years. Natural Health also reported positive cash flows from operations for the first time in five quarters.
Looking ahead, Sharng said, “While guardedly optimistic about the start to the Year of the Dragon, we think these results are indicative of the effectiveness of our current programs.”
