Bitcoin’s back above the $4,000 marker. Hurrah! Volatility has been a bugbear (to put it mildly) for holders of the virtual currency over the past year, so any sudden price spikes should of course be embraced.
As I type, Bitcoin is changing hands at 2019 highs above the $4,100 marker and, having barged through key technical levels, some traders are confident of further chunky gains in the coming sessions.
There could certainly be room for the entire cryptocurrency space to gain additional traction in the days, weeks and months ahead should regulation of the new-age assets take positive steps and attempts to introduce coin-backed exchange traded funds get off the ground.
Currently, questions over whether Bitcoin is a legitimate investment opportunity, ranging from what impact will future currency forks have on prices to who actually owns it, continue to bedevil the asset. And many of these are unlikely to be soothed in the near future.
The ongoing volatility also scares me. Bitcoin showed from late 2017 onwards what goes up like a rocket can often fall back to earth like a rock. The currency may be back in vogue, but I remain sceptical over whether it can be considered as a sensible, investable asset.
The king of Spain
If I had some excess capital waiting to be invested, I’d much rather use it to buy shares of Banco Santander (LSE: BNC).
Unlike Bitcoin, there’s no doubt that the banking giant will still be here in 10 years time and in a position to deliver striking returns, in my opinion.
In particular, I’m in love with Santander’s extensive exposure to the emerging markets of Latin America, territories which currently constitute a large part of the total profits pie — more than 40% of attributable profits, to be exact. It’s where the bottom line should keep on surging on a combination of rampant wealth growth and relatively-low penetration of financial products.
Latest annual results certainly underlined the fertile landscape for Santander in Central and South America. In 2018, aggregated attributable profit from these territories leapt 16% to €4.23bn as profits in its major markets of Brazil, Mexico and Chile swelled.
In fact, the rate of growth in its Brazilian marketplace gave particular cause for celebration. The bank’s profits growth in the continent’s largest economy boomed 22% last year to €2.61bn, reinforcing the country’s position as Santander’s single largest market.
Big, big dividends
In the near term, Santander’s investment outlook is pretty attractive as well. With stable conditions in Europe supplementing its ripping progress in Latin America, earnings at the bank are expected to rise 9% and 6% in 2019 and 2020, respectively.
And this means that dividends are expected to keep marching northwards too, meaning yields sit a delicious 5.5% for 2019, and 5.8% for next year.
There’s a lot for share pickers to get their teeth into here, and particularly so for a stock with such a low rating. Indeed, I reckon Santander’s low forward P/E ratio of 8.1 times reinforces it as a great equity to load up on today.