- I expect the preferred shares of Surgutneftegas to be one of the best dividend ideas in the Emerging Markets for income-oriented portfolios.

- My analysis outlines 14.45% of the currency-hedged position in preferred stocks' dividend yield (basic scenario) and 14.07% (worst-case scenario).

- Unlike the ADR's dividends, preferred ones will be recession-proof, as they represent a fixed percentage of the net profit, being not subject to the Board of Directors' approval.

- Such an idea is perfectly suitable for risk-averse investors, as the proposed position will produce extraordinary yield, but bond-like reliability in terms of expected forward cash flows.
Fortunately, the market hasn't adjusted the price of the stock yet, still allowing to jump on.

REASONING
It is no secret for any sophisticated investor that the oil and gas industry is under pressure right now due to two connected, but still different factors. And while most of the investors are cutting their positions in this sector, expecting underperformance, a more in-depth look might offer to take advantage of such a situation.
Surgutneftegas is famous for having naturally hedged net profit because it's sensitive simultaneously to the oil price through the revenue and USD/RUB through a vast "cash pillow" in dollars. The Russian Ruble depends on oil prices much, because so is the Russian economy that has approximately 60-70% of GDP formed by oil and gas industry and other 10-20% - by oil-related services. Therefore, any oil price plunge, just like we've witnessed recently, leads to cut in Surgutneftegas's revenue, but at the same time causes cash holding revaluation, which is then treated as financial investment gain, impacting the net profit for the year.
Thus, while most of the investors predict quite high dividends for Surgutneftegas's common stock and ADRs (just as Seeking Alpha does), those are subject to reconsideration, as the whole oil industry should expect to experience plummeting future revenues. I suppose that recently created OPEC+ deal either will drive current revenues and investments in oil industry down (and most of the Russian oil production is of the type that can hardly be frozen, as the oilfield gets watered immediately), impacting further production (I should highlight that the lag between capital expenditures and new oil production revenue is around two years), or will keep prices lower than before the crisis even after a rebound, in case…

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