Beside the diversification throughout industries and sectors, investors also get diversified by countries and currencies. Indirectly, they are already abroad with stocks that are active in foreign countries. Big companies like Coca Cola (KO), General Electric (GE) or Procter and Gamble (PG) make huge revenues outside the United States but they still have a huge national engagement. A direct way to increase the diversification by countries and currencies is to invest in foreign stocks.
I screened U.S. listed large capitalized stocks with homebase outside the United States and a dividend yield of more than 5 percent. In addition, the forward price-to- earnings ratio should be under 15 and the price-to-book ratio less than one. 8 stocks remained. Half of the results come from the financial sector.
Here are three interesting stocks from the screening results:
1. Vodafone (VOD) is home based within the United Kingdom and acting within the wireless communications industry. The company has a market capitalization of $136.3 billion, generates revenue in an amount of $72.4 billion and a net income of $12.6 billion. It follows P/E ratio is 10.9 and forward price-to-earnings ratio 8.7, Price/Sales 1.9 and Price/Book ratio 1.0. Dividend Yield: 5.6 percent. The beta ratio amounts to 0.86.
2. Eni (E) is home based in Italy and acting within the major integrated oil and gas industry. The company has a market capitalization of $70.5 billion, generates revenue in an amount of $145.1 billion and a net income of $8.4 billion. It follows P/E ratio is 7.6 and forward price-to-earnings ratio 6.2, Price/Sales 0.5 and Price/Book ratio 0.9. Dividend Yield: 8.2 percent. The beta ratio amounts to 0.96.
3. Banco Santander (STD) is home based in Spain and acting within the foreign money center banks industry. The company has a market capitalization of $67.1 billion, generates revenue in an amount of $43.4 billion and a net income of $11.3 billion. It follows P/E ratio is 6.0 and forward price-to-earnings ratio 4.9, Price/Sales 1.6 and Price/Book ratio 0.6. Dividend Yield: 10.8 percent. The beta ratio amounts to 1.73.
Take a closer look at the full table of 8 cheap foreign high yield stocks. The average price-to-earnings ratio (P/E ratio) amounts to 7.8 while the average forward P/E ratio is 6.9. The dividend yield has an average value of 7.2 percent. Price-to-book ratio is 0.8 and price to sales ratio 1.3. The operating margin amounts to 17.1 percent.