Using Money Morning’s proprietary VQScore™ stock valuation system, I found an undervalued dividend stock that’s flashing a huge “Buy” signal right now.
Through the system, we track the 1,500 most profitable companies on the market. A VQScore of 4.00 or higher puts a stock in the “Buy Zone.” These are the stocks priced to make you money.
It’s undervalued right now because Wall Street is ignoring huge revenue growth potential thanks to international expansion.
Specifically, the money floodgates are going to open as this firm plans to build at least seven multimillion-dollar entertainment complexes in Asia by 2020.
Now, I know that’s a two-year wait.
But this company rewards shareholders with a massive dividend of $3.12 per share, a yield of 4.87%.
That means you’re being paid to own the stock before Wall Street figures out it’s undervalued.
But dividends also amplify the profits you’re making as the share price grows…
DRIPs Can Make You a Fortune
In the video below, we provide all the details on what DRIPs are and how they work.
And the biggest takeaway is that they can build your stake in a company over time, making your holdings more valuable, without adding any more money to your brokerage account.
For example, using a DRIP, a $10,000 stake in Apple Inc. (Nasdaq: AAPL) on Dec. 31, 1997, would now be worth $4.4 million dollars, according to DividendChannel.com.
That would have boosted your profit 5% more than if you didn’t use a DRIP.
That 5% amounts to $200,000, and I don’t know anyone who would turn down nearly a quarter of a million dollars.
DRIPs are simply one of the most effective investing tools for building long-term wealth.
And by knowing about this undervalued dividend stock now, you can use a DRIP to acquire more shares for absolutely free.
The stock price is expected to climb 30% over the next 12 months alone, and the more shares you own, the more valuable your total holdings will be.
But you’ll need to act right now, before this stock gets too popular…
You Don’t Have Much Time to Own This Undervalued Dividend Stock
The company that flashed a VQScore of 4.75 is Six Flags Entertainment Corp. (NYSE: SIX).
The entertainment destination was founded in 1961, and it has 20 locations throughout the United States, Canada, and Mexico.
It has increased revenue every year since 2010, showing that no matter what financial state the United States is in, people will always still ride on roller coasters.
Right now, only 8.7% of Six Flag’s revenue comes from outside the United States (Canada, 5.4%, and Mexico, 3.3%).
But as I mentioned earlier, the floodgates are about to open thanks to Asian expansion…
Six Flags is building 10 parks in China, according to Skift.com. Two parks will be located in Bishan, which has a surrounding population of 120 million people.
And this massive new audience will generate a ton of international revenue…
In 2017, international licensing revenue generated $38 million.
Now, with just a total of three locations in Canada and Mexico, that’s an average of $12.6 billion per location, just for licensing deals.
With 10 more locations in the world’s most populated country, that could be additional international licensing revenue of $126 million.
Remember, that’s the average from other countries.
With China’s population of 1.4 billion, that’s just a conservative estimate.
Hypothetically, if the theme park giant brought in a total of $156 million from international deals in 2018, that would be an 11.76% increase in revenue just from international deals.
That doesn’t even include U.S. parks bringing in more sales.
And when Wall Street finally catches on, more SIX shares will be bought, sending the price of Six Flag stock higher.
You’re ahead of the curve by knowing this now, and you’ll also be paid a $3.12 dividend while the story plays out.
In fact, one analyst is agreeing with our bullish take on the theme park company…
Over the next 12 months, financial firm Stifel Nicolaus projects the SIX stock price will climb to $80 per share. From [a recent] opening price of $61.33, that’s a potential profit of 30.44%.
And that’s just over the next 12 months.
The Bottom Line: Six Flags stock flashed a 4.75 on our VQScore valuation system, making it one of the best undervalued dividend stocks to buy. It’s an undervalued stock because of future international revenue growth, and it also pays a generous dividend of $3.12 (4.87% yield).
— Jack Delaney
Source: Money Morning