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We like investing in emerging markets for three reasons. First, emerging market stocks are cheaper based on current P/E ratios. Second, emerging countries have higher GDP growth rates. Third, emerging market currencies are usually undervalued, and they will eventually catch up with the U.S. dollar. Emerging markets can be very volatile and the losses for short term investors may be dramatic especially in down trends. However, long term investors with diversified portfolios can protect themselves from dollar inflation and benefit from emerging markets’ higher growth rates.

American Depository Receipts (ADRs) are one of the most effective instruments to invest in foreign markets. First, ADRs provide convenience in terms of trading and reporting of those trades to the IRS. Moreover, the transaction costs for ADR trades are much lower compared with what they’d be if executed through local exchanges. Also, ADRs allow investors not to be trapped into huge spreads most banks charge when converting U.S. dollars to the stocks’ local currency. These benefits are visible when trading in emerging markets’ stocks.

We compiled a list of 14 large cap ADRs with tremendous growth rates that also pay fat dividend checks regularly. The market data are sourced from Fidelity. All companies in this list have market capitalizations above $25 billion, a P/E ratio smaller than 20, annualized dividend yields of at least 4% and EPS growth of 10% over the last five years.

Dividend Yield

EPS Growth (5 Year Historical)

P/E Ratio

E.ON AG

OTCQX:EONGY

10.33%

12.21%

5.31

Telefonica SA

TEF

9.56%

22.53%

6.92

Banco Santander Brasil

BSBR

7.78%

27.30%

6.39

Astrazeneca Plc.

AZN

5.90%

13.87%

8.11

Repsol YPF SA

OTCQX:REPYY

5.52%

10.98%

5.19

Chungwa Telecom Co.

CHT

5.39%

10.53%

16.62

Daimler AG

OTCPK:DDAIF

5.27%

11.34%

7.46

Sanofi SA

SNY

4.94%

22.85%

15.2

Petroleo Brasileiro SA

PBR.A

4.58%

10.89%

7.04

Telenor ASA

OTCPK:TELNY

4.42%

17.99%

11.97

Taiwan Semiconductor Manufacturing Co.

TSM

4.41%

14.04%

10.58

BASF SE

OTCQX:BASFY

4.34%

14.15%

7.45

Companhia de Bebidas

ABV

4.30%

48.44%

19.74

Novartis AG

NVS

4.20%

10.21%

13.55

Here are 14 large-cap ADRs on our list:

E.ON AG (OTCQX:EONGY): E.ON AG is a German energy company generating and distributing electricity in Europe and North America. EONGY has a 10.33% annualized dividend yield. Over the past 5 years, EONGY had an EPS Growth of 12.21%. The stock has a market cap of $41.86B and P/E Ratio of 5.31.

Telefonica SA (NYSE:TEF): Telefonica SA is a telecommunications company providing both fixed and mobile telephone services primarily in Spain. TEF has a 9.56% dividend yield. Over the past 5 years, TEF had an EPS Growth of 22.53%. The stock has a market cap of $93.23B and P/E Ratio of 6.92.

Banco Santander Brasil SA (NYSE:BSBR): Banco Santander Brasil SA is a subsidiary bank of Banco Santander, operating in Brazil. BSBR has a 7.78% dividend yield. Over the past 5 years, BSBR had an EPS Growth of 27.30%. The stock has a market cap of $32.76B and P/E Ratio of 6.39.

Astrazeneca Plc. (NYSE:AZN): Astrazeneca Plc. is a British pharmaceutical company providing medicines worldwide. AZN has a 5.90% dividend yield. Over the past 5 years, AZN had an EPS Growth of 13.87%. Dividends also more than doubled from $1.025 to $2.7 since 2005. AZN has a market cap of $63.64B and P/E Ratio of 8.11. Jim Simons’ Renaissance has the largest stake in AZN with a $28 Million position at the end of June (see billionaire Jim Simons’ top stock picks).

Repsol YPF SA (OTCQX:REPYY): Repsol YPF SA is a Spanish energy company operating worldwide. REPYY has a 5.52% dividend yield. Over the past 5 years, REPYY had an EPS Growth of 10.98%. Since 2005, the company raised its cash dividends more than 200%. REPYY has a market cap of $33.00B and P/E Ratio of 5.19.

Chungwa Telecom Co. (NYSE:CHT): Chungwa Telecom Co. is a large telecommunications company in Taiwan. CHT has a 5.39% dividend yield. Over the past 5 years, CHT had an EPS Growth of 10.53%. Over the past 2 years, the stock gained more than 200%. CHT has a market cap of $27.37B and P/E Ratio of 16.62.

Daimler AG (OTCPK:DDAIF): Daimler AG is a German automobile manufacturer operating worldwide. DDAIF has a 5.27% dividend yield. Over the past 5 years, DDAIF had an EPS Growth of 11.34%. Dividends also more than tripled from $0.7899 to $2.68 since 2009. DDAIF has a market cap of $55.90B and P/E Ratio of 7.46.

Sanofi SA (NYSE:SNY): Sanofi SA is a French pharmaceutical company operating worldwide. SNY has a 4.94% dividend yield. Over the past 5 years, SNY had an EPS Growth of 22.85%. The company’s cash dividends more than doubled since 2005. SNY has a market cap of $98.35B and P/E Ratio of 15.20. Ken Fisher’s Fisher Asset Management has nearly 15 Million shares of the stock after the second quarter 11% increase. As of the end of June, the fund had nearly $600 Million in Sanofi. Warren Buffett’s Berkshire Hathaway comes in second with $163 Million (see Warren Buffett’s favorite stocks).

Petroleo Brasileiro SA (NYSE:PBR.A): Petroleo Brasileiro SA is a large energy corporation owned partially by Brasilian government. PBR is also is the largest corporation in Latin America by market cap. PBR has a 4.58% dividend yield. Over the past 5 years, PBR had an EPS Growth of 10.89%. The stock has a market cap of $103.23B and P/E Ratio of 7.04.

Telenor ASA (OTCPK:TELNY): Telenor ASA is a Norwegian telecommunications company. TELNY has a 4.42% dividend yield. Over the past 5 years, TELNY had an EPS Growth of 17.99%. Dividends also tripled from $0.70 to $2.11 since 2005. The stock has a market cap of $26.29 and P/E Ratio of 11.97.

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM): Taiwan Semiconductor Manufacturing Co. is a large semiconductor manufacturer operating in Taiwan. TSM has a 4.41% dividend yield. Over the past 5 years, TSM had an EPS Growth of 14.04%. The stock has a market cap of $60.84B and P/E Ratio of 10.58.

BASF SE (OTCQX:BASFY): BASF SE is a German chemical company operating worldwide. BASFY has a 4.34% dividend yield. Over the past 5 years, BASFY had an EPS Growth of 14.15%. The company raised its dividends from $1.091 to $3.14 since 2005. BASFY has a market cap of $66.47B and P/E Ratio of 7.45. Billionaire investor Ken Fisher had $923 Million in BASF at the end of June (see Ken Fisher’s top stock picks).

Companhia de Bebidas (ABV): Companhia de Bebidas is a South American brewery company. ABV has a 4.30% dividend yield. Over the past 5 years, ABV had an EPS Growth of 48.44%. The stock more than doubled its price since 2009. ABV has a market cap of $45.87B and P/E Ratio of 19.74.

Novartis AG (NYSE:NVS): Novartis AG is a Swiss pharmaceutical company operating worldwide. NVS has a 4.20% dividend yield. Over the past 5 years, NVS had an EPS Growth of 10.21%. The company raised its dividends from $0.88 to $2.36 since 2005. NVS has a market cap of $140.11B and P/E Ratio of 13.55. Jim Simons initiated a brand new position in NVS during the second quarter. He had $125 Million invested at the end of June (see Jim Simons’ other new stock picks).

Source: 14 High Dividend ADRs With Strong Growth And Low P/E