Some foreign large-cap companies trade on the OTC market instead of the organized exchanges. Investors can find well-established companies paying high dividends on these markets. Though trading volumes may be thin, for the average buy-and-hold long-term investor this should not be an issue.
To identify some of the high-yielding large cap foreign stocks, I ran the screener with the following criteria:
Stocks must trade on the OTC market
Market cap must be >= $5B
Dividend yield must be at least 5%
The screener returned the following 11 stocks:
|S.No.||Name||Ticker||Dividend Yield as of Jan 7, 2011||Market Capitalization||Sector & Industry|
|1||Australia and New Zealand Banking||OTCPK:ANZBY||6.22%||$58.3B||Money Center Banks|
|2||Advanced Info Service PCL||OTCPK:AVIFY||13.86%||$8.6B||Communications Services|
|3||Deutsche Telekom AG||OTCQX:DTEGY||8.02%||$55.4B||Communications Services|
|4||EDP-Energias de Portugal, S.A||OTCPK:EDPFY||5.73%||$12.2B||Electric Utilities|
|5||E.ON AG||OTCQX:EONGY||6.14%||$56.8B||Electric Utilities|
|6||Imperial Tobacco Group PLC||OTCQX:ITYBY||6.25%||$31.8B||Tobacco|
|7||National Australia Bank Ltd.||OTCPK:NABZY||6.37%||$50.5B||Regional Banks|
|8||RWE AG||OTCPK:RWEOY||6.85%||$33.0B||Electric Utilities|
|9||Telekom Austria AG||OTCPK:TKAGY||6.42%||$5.9B||Communications Services|
|10||Telstra Corporation Limited||OTCPK:TLSYY||9.45%||$34.6B||Communications Services|
|11||Zurich Financial Services||OTC:ZFSVY||5.69%||$37.6B||Insurance (Prop. & Casualty)|
European companies dominate the above list. German electric utilities E.ON (OTCQX:EONGY) and RWE AG (OTCPK:RWEOY) are two of the largest utilities in Germany and have yields in excess of 6%. After reaching a peak of over $70, EONGY fell under $25 and now trades just below $30. Similarly RWEOY trades at less than half the price of its peak of over $140. Both these companies have operations in several other European countries as well. In the U.S., E.ON has operations in the state of Kentucky.
Despite the ongoing debt issues faced by Portgual and the risks involved in investing in the country, Energias de Portugal, S.A (OTCPK:EDPFY) is one of the few Portuguese companies that investors can consider adding now since it is an electric utility and offers an excellent yield.
Australian banking giants Australia and New Zealand Banking (OTCPK:ANZBY) and National Australia Bank Ltd. (OTCPK:NABZY) were not heavily affected by the credit crisis and are growing in the domestic market and abroad. Australia’s increased trade with other Asian countries is helping them also.
Advanced Info Service PCL (ADVFY.PK) is the largest mobile phone services operator in Thailand in terms of subscribers and revenues. The company maintains market leadership in both urban and rural areas. AIS has a low debt profile and a strong dividend payment history. AIS aims to pay at least 100% of net profits as dividends. Like most European firms, AIS pays an interim and a final dividend each year. The ADR for Advanced Info Service has been trading on the OTC market since 1992 under the ticker ADVFY.
Disclosure: Long E.ON AG