Mowi (MHGVY) is the largest salmon farmer in the world with a 20% share of the world salmon market. The company is based in Norway but it is available as an ADS. (US investors should evaluate some special conditions regarding the impact of currency translation on returns which we will discuss in a section below.)

The current trailing dividend yield is 3.1% and the company expects to pay out 50% of earnings as a dividend so we see strong potential for the yield to increase. Before Covid, Mowi’s dividend was often over 5% of the current stock price and the company has a history of paying special dividends as well.

Net debt is only 1.5x EBITDA. We believe the market is still missing the long-term potential here and only trades Mowi based on spot prices for commodity salmon with the memory of Covid lockdowns fresh on its mind. The lockdowns stopped many international flights, which made it cost-prohibitive to get fresh salmon to Asia which is a key market for the company. This in turn meant that supply headed to those areas was instead sold closer to where it was produced and glutted those markets driving down prices. Restaurant consumption was also decimated.

However, there are several factors that we believe make Mowi attractive to long-term investors that are currently under-appreciated by the market:

(As usual, not investment advice. Do your own homework.)