Best Irish Stocks To Buy: The Celtic Tiger unleashed the potential of the Irish economy, but in 2008 it fell apart spectacularly. Bank stocks plummeted, Irish real estate crashed, developers went bankrupt, and it seemed the Emerald Isle was plunged into economic armageddon. More than a decade later, the Celtic Tiger is back with a vengeance. So what are the top Irish shares to invest in?
Kerry Group Is More Than Just A Global Play On Butter Exports
Kerry Group plc. [LON: KYGA] is a public food company headquartered in Ireland. The company is a world leader in the global food industry, supplying a vast portfolio of foods, food ingredients and flavor products to customers in the UK, USA, Asia and globally.
The company, together with its subsidiaries, develops, manufactures, and delivers technology-based taste and nutrition solutions for food industries across the globe. The company operates in two segments:
- Taste & Nutrition and
- Consumer Foods and Agribusiness
Strong Performance In Meat & Beverage Keeps Momentum Strong
Gaining momentum from recent acquisitions, favorable foreign currency translation, and strong performance in meat, snacks and beverage end use markets along with other positive trends, Kerry Group plc [LON: KYGA] reported 19% revenue growth in the first half of the fiscal year in the Americas region.
The food ingredients’ suppliers reported revenues of €1,556 million ($1,742.7 million) in the Americas, up from €1,306.9 million reported in the same period of the previous year.
Companywide, Kerry Group plc posted revenues of €3,568.9 million ($3,997.1 million), an upswing of 11% from €3,225.3 million it posted in the first half of the previous year. Acquisitions contributed 4.7% of the growth. Volume growth of 3.3% was driven by meat, snacks and beverage end use markets, and favorable translation currency had a positive impact of 2.3%.
In the meat segment, the company’s growth was supported by the introduction of regional flavors, cleaner labels, innovation in natural shelf life preservation and plant-based alternatives. The acquisition of Southeastern Mills (North American coatings and seasonings business), based in Rome, Ga., added further impetus to the meat business.
Healthy Snacks & Dairy Boosted Kerry Group Financials
The snacks segment too joined the party, contributing through healthier snacking and new world taste experiences, with Latin America returning the most impressive performance.
Dairy also notched up gains as the ice cream and desserts category moved toward premiumization, low calorie and plant-based offerings.
The end-user market too delivered on the growth front as beverages and food service profited from innovations, using Ganeden probiotics and Wellmune’s immunity enhancing technologies.
The company continues to witness volume growth across the global marketplace, driven by innovation, including plant-based diets, convenience, clean label, sustainability, authenticity, healthfulness, and premiumization.
All in all, Kerry Foods remains well-positioned in the growing dairy and meat snacking segments as well as snacks and beverage segment.
Kingspan Enjoys Record 1st Half Despite Concerns over UK and German Economies
Kingspan Group plc., [ISEQ: KRX] together with its subsidiaries, engages in the manufacture and supply of building solutions for the commercial, residential, and data storage industries in the Republic of Ireland, the United Kingdom, and globally.
The company, with presence in over 70 countries, operates with five divisions: Insulated Panels, Water & Energy, Insulation Boards, Light & Air, and Data & Flooring Technology. Its primary products include insulated panels, rigid insulation boards, structural framing, architectural facades, ventilation solutions, etc.
Kingspan Financials Has Enjoyed Stellar Financials HIstorically
Kingspan plc [ISEQ: KRX] reported a record first-half this year, with all of its business units delivering stellar performances.
For six months up to 30 June, pre-tax profit rose to €208.9m from €177.6m a year earlier and revenue rose to €2.24bn from €2.01bn the year before, an upswing of 12%.
Trading was good across most of Continental Europe, though the situation in Germany raised a bit of concern.
The UK market delivered well for the building insulation specialist as did the Americas. KRX outdid the Irish Building industry, which returned 34.5% over the past year.
It also topped the Irish market, which returned 25.3% over the past year. The company, encouraged by the revenue growth, raised interim dividend per share by 8% to 13.0.
Kingspan Group is a growing business and the company is doing a good job of expanding its global footprints with new facilities under construction in the US, Brazil and Sweden.
With the earning growth right on track and a meaningful level of insider ownership, this is one stock worth watching. The near-term outlook is solid, although the weakness in sterling and a slowing German economy possess some risks.
Analysts offering 1-year price targets for Kingspan Group plc have a median target of GBX 54.00, with a high estimate of GBX 64.00 and a low estimate of GBX 39.50.
Hibernia REIT: Recurring Dividend REIT
Hibernia REIT plc [LON: HBRN] operates as a real estate investment trust. The company, together with its subsidiaries and associated undertakings, engages in investment and development of commercial properties including offices, industrial properties, retail stores, warehousing and distribution centers, among others.
The company incorporated and domiciled in Ireland focuses on properties located in Dublin, Ireland.
REITs Face Headwinds But Asset Values Are Low
Irish REITs have been facing some headwinds in recent times and Hibernia REIT [LON: HBRN] is no exception to it. Green REIT and Hibernia REIT have both suffered setbacks, but their strong performance and underlying value convey a sense of optimism, analysts believe.
However, analysts are having a hard time wrapping their head around asset valuation of Hibernia REIT, which is unbelievingly low.
A 3.6% rental yield is just way too low, particularly when compared to its UK peers. The stock price or performance of Hernia fails to properly reflect the stability of the incomes in Dublin and the impressive performance of the Irish market.
Hibernia, like any other REIT, derives its main income from Funds from Operations or FFO. It is a better indicator of how much Hernia is netting from its day-to-day operations, as compared to net income, which can be sullied by a host of factors such as depreciation.
A sum of €39m of FFO represents up to 85% of Hibernia’s gross profit, which means a majority of its earnings are first-class and recurrent.
However, Hibernia has an ultra-strong balance sheet. With a Loan to Value (LTV) ratio of just over 15%, it is one of the best in the REIT sector.
Hibernia REIT can bring diversification into your portfolio due to its unique REIT characteristics, and its ability to generate a certain level of recurring income in the form of dividends makes it a good investment.
Smurfit Kappa: Strong Demand Provides Solid Thrust to the Paper Packaging Company
Smurfit Kappa Group plc [ISEQ: SK3] [LSE: SKG], together with its subsidiaries, provides paper-based packaging products. The Dublin, Ireland-based company, with 350 production sites around the world, locations in 21 countries in Europe, and 12 countries in the Americas, is Europe’s leading corrugated packaging company and one of the leading paper-based packaging companies in the world.
It operates through two segments, Europe and the Americas. The company manufactures, distributes and sells containerboard, solid board sheets, folding carton sheets, graphic boards, corrugated containers and other paper-based packaging products.
Packaging Solutions Are Always In-Demand > Smurfit Benefits
The demand for paper-based packaging in our world is not going to witness any decline anytime soon, which puts Smurfit Kappa Group [ISEQ: SK3] [LSE: SKG] in a unique position to leverage its expertise in the field. With an increasing demand for sustainable packaging solutions and Smurfit Kappa’s expertise in paper-based packaging, the company finds itself in a unique position to cash in on the opportunity.
The same is reflected in its stock performance. The company’s revenue grew 15% in the past five years, but its earnings grew almost 100%.
Investors have been handsomely rewarded, with the company upping the dividend by 85% in the same period. What makes for a perfect icing on the cake is that the company’s stocks are now trading over 100% higher than they did five years ago.
The packaging company’s operating earnings for the first nine months of the year witnessed 11% growth, lifted by increasing sales volumes and margins. In Europe, the corrugated box volume growth was close to 4% year-on-year. In the Americas, organic volume growth was about 2%.
Irrespective of some macro-economic and political challenges, Smurfit Kappa has managed to deliver, which makes its stocks tempting.
Tesco: Showing Signs of Revival
Tesco PLC [LSE: TSCO] [ISEQ: TCO] is not technically an Irish stock but it does have significant presence in Ireland. In fact, it is a British multinational groceries and general merchandise retailer.
The company also provides retail banking and insurance services, which include credit card receivables, personal current accounts and personal loans, among others.
The Welwyn Garden City, Hertfordshire, England, United Kingdom-based company revenue wise is the ninth-largest retailer in the world. A market leader in groceries in the UK, Tesco has operations in Thailand, Malaysia, India, Hungary, Poland and globally.
Tesco Is A Play On Consumer Demand
Tesco PLC, [LSE: TSCO] [ISEQ: TCO] had always been on the agenda of investors who were a bit risk-averse.
Investors and customers bought and kept the retailer’s shares because they scored well on parameters of safety and reliability. Things were good while they were good. The grocer’s reputation grew, propped up by good results and rising dividends. It was all like a fairytale, till it was not.
Between 1990 and 2007, Tesco shares rose from 62p to £4.95. However, by 2015, they had dived below £1.50, the party spoiled by rivals snapping at the heels, poor management decisions and an accounting scandal that nearly rocked the boat.
Thinks have moved somewhat positively since then with rising sales, better dividends and growing profits. The shares are currently trending around £2.40.
The group certainly finds itself in a much better position today, keen on broadening its horizons with heightened investment in online shopping, opening up of four new superstores and plans to open Express stores in the UK and in Thailand.
And in keeping with consumers’ sentiments, Tesco is working vigorously to limit plastic waste at the same time it is introducing more plant-based products. The merger with wholesaler Booker is shoring up sales for the retailer.
On the flip side, discounters, Morrisons and Sainsbury’s are breathing down Tesco’ neck, price wars are showing no signs of letting up, consumers are becoming more and more demanding and the economic uncertainty is becoming a major concern. Despite all these factors, analysts still expect a slight rise in profit, dividend as well as revenue.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.