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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 apparent when trading in emerging markets stocks.

We compiled a list of 19 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, P/E ratios below 20, annualized dividend yield of at least 4% and EPS growth of 10% over the last five years.

Dividend Yield

EPS growth (5-Year Historical)

P/E Ratio

Telefonica SA

TEF

9.62%

22.53%

7.05

Banco Santander Brasil SA

BSBR

9.55%

27.30%

6.06

E.ON AG

OTCQX:EONGY

8.80%

12.21%

11.53

Westpac Banking Corp.

WBK

7.12%

12.74%

9.10

Chungwa Telecom Co.

CHT

5.85%

10.53%

14.79

Astrazeneca Plc.

AZN

5.77%

13.87%

8.14

Daimler AG

OTCPK:DDAIF

5.47%

11.34%

7.35

Petroleo Brasileiro SA

PBR

5.21%

10.89%

6.22

Sanofi SA

SNY

5.17%

22.85%

14.61

Repsol YPF SA

OTCQX:REPYY

4.97%

10.98%

5.64

BASF SE

OTCQX:BASFY

4.58%

14.15%

7.05

Companhia de Bebidas

ABV

4.52%

48.44%

19.24

British American Tobacco Plc.

BTI

4.38%

11.69%

17.10

Taiwan Semiconductor

TSM

4.37%

14.04%

10.96

Telenor ASA

OTCPK:TELNY

4.36%

17.99%

12.03

China Mobile Ltd.

CHL

4.30%

21.71%

10.40

Roche Holding AG

OTCQX:RHHBY

4.29%

16.10%

13.30

Imperial Tobacco Group Plc.

OTCQX:ITYBY

4.26%

10.88%

12.70

Novartis AG

NVS

4.11%

10.21%

13.69

We believe one of the best ways to invest in foreign markets is through ADRs. Here are 19 large-cap ADRs on our list:

Telefonica SA (NYSE:TEF): Telefonica SA is a telecommunications company providing both fixed and mobile telephone services primarily in Spain. TEF has a 9.62% dividend yield. Over the past 5 years, TEF had an EPS growth of 22.53%. The stock has a market cap of $94.90B and P/E ratio of 7.05.

Banco Santander Brasil SA (NYSE:BSBR): Banco Santander Brasil SA is a subsidiary bank of Banco Santander, operating in Brazil. BSBR has a 9.55% dividend yield. Over the past 5 years, BSBR had an EPS growth of 27.30%. The stock has a market cap of $31.09B and P/E ratio of 6.06.

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 8.80% annualized dividend yield. Over the past 5 years, EONGY had an EPS growth of 12.21%. The stock has a market cap of $47.44B and P/E ratio of 11.53.

Westpac Banking Corp. (NYSE:WBK): Westpac Banking Corp. is an Austrialian financial services company operating worldwide. WBK has a 7.12% annualized dividend yield. Over the past 5 years, WBK had an EPS growth of 12.74%. The stock has a market cap of $66.20B and P/E ratio of 9.1.

Chungwa Telecom Co. (NYSE:CHT): Chungwa Telecom Co. is a large telecommunications company in Taiwan. CHT has a 5.85% dividend yield. Over the past 5 years, CHT had an EPS growth of 10.53%. CHT has a market cap of $25.36B and P/E ratio of 14.79.

AstraZeneca Plc (NYSE:AZN): AstraZeneca Plc is a British pharmaceutical company providing medicines worldwide. AZN has a 5.77% dividend yield. Over the past 5 years, AZN had an EPS growth of 13.87%. AZN has a market cap of $62.71B and P/E ratio of 8.14. David Dreman had $23 million in AZN at the end of second quarter.

Daimler AG (OTCPK:DDAIF): Daimler AG is a German automobile manufacturer operating worldwide. DDAIF has a 5.47% 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 $55.07B and P/E ratio of 7.35.

Petroleo Brasileiro SA (NYSE:PBR): Petroleo Brasileiro SA is a large energy corporation owned partially by Brasilian government. PBR has a 5.21% dividend yield. Over the past 5 years, PBR had an EPS growth of 10.89%. The stock has a market cap of $91.17B and P/E ratio of 6.22. Billionaire George Soros is among the hedge fund managers who are bullish about PBR.

Sanofi SA (NYSE:SNY): Sanofi SA is a French pharmaceutical company operating worldwide. SNY has a 5.17% 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 $94.49B and P/E ratio of 14.61.

Repsol YPF SA (OTCQX:REPYY): Repsol YPF SA is a Spanish energy company operating worldwide. REPYY has a 4.97% 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 $36.70B and P/E ratio of 5.64.

BASF SE (OTCQX:BASFY): BASF SE is a German chemical company operating worldwide. BASFY has a 4.58% 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 $62.98B and P/E ratio of 7.05.

Companhia de Bebidas (ABV): Companhia de Bebidas is a South American brewery company. ABV has a 4.52% dividend yield. Over the past 5 years, ABV had an EPS growth of 48.44%. The stock has a market cap of $44.73B and P/E ratio of 19.24.

British American Tobacco Plc. (NYSEMKT:BTI): British American Tobacco Plc. is one of the largest tobacco companies operating worldwide. BTI has a 4.38% dividend yield. Over the past 5 years, BTI had an EPS growth of 11.69%. The stock has a market cap of $88.02B and P/E ratio of 17.10.

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM): Taiwan Semiconductor Manufacturing Co. is a large semiconductor manufacturer operating in Taiwan. TSM has a 4.37% dividend yield. Over the past 5 years, TSM had an EPS growth of 14.04%. The stock has a market cap of $63.08B and P/E ratio of 10.96.

Telenor ASA (OTCPK:TELNY): Telenor ASA is a Norwegian telecommunications company. TELNY has a 4.36% 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 $26.44B and P/E ratio of 12.03.

China Mobile Ltd. (NYSE:CHL): China Mobile Ltd. is a large Chinese telecommunications company owned by the Chinese government. CHL has a 4.30% dividend yield. Over the past 5 years, CHL had an EPS growth of 21.71%. The stock has a market cap of $192.28B and P/E ratio of 10.40.

Roche Holding AG (OTCQX:RHHBY): Roche Holding AG is a Swiss healthcare and pharmaceuticals company operating worldwide. RHHBY has a 4.29% dividend yield. Over the past 5 years, RHHBY had an EPS growth of 16.10%. The stock has a market cap of $115.89B and P/E ratio of 13.30.

Imperial Tobacco Group Plc. (OTCQX:ITYBY): Imperial Tobacco Group Plc. is a UK-based tobacco company operating worldwide. ITYBY has a 4.26% dividend yield. Over the past 5 years, ITYBY had an EPS growth of 10.88%. The stock has a market cap of $35.91B and P/E ratio of 12.70.

Novartis AG (NYSE:NVS): Novartis AG is a Swiss pharmaceutical company operating worldwide. NVS has a 4.11% 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 $140.86B and P/E ratio of 13.69. Bilionaire Jim Simons’ Renaissance Technologies has the largest stake in NVS among the 300+ hedge funds we are tracking.

Source: 19 High-Yield ADRs With Strong Growth And Low P/Es