Four Ways to Invest in the Small Country of Scotland

According to a recent article on the BBC website, Scotland is the 'worst small country' according to The Federation of Small Businesses'. But is this really true? Let's take a closer look at Scotland.

One of the most important features of Scotland is that it is known as the birthplace of numerous inventions including the steam engine, the bicycle, the telephone, the television, the transistor, the motion picture, penicillin, electromagnetics, radar, insulin, calculus, the speedometer, the wave-powered electricity generator, the steamboat, the adhesive postage stamp, the post office, hypnosis, criminal fingerprinting, the MRI body scanner, the first cloned mammal, golf, and the hypodermic syringe.

Below are some facts about Scotland that are important to potential investors:

It is the birthplace of Adam Smith, the father of modern economics.

It has Edinburgh as the country's capital, which is one of Europe's largest financial centers.

It has the largest oil reserves in the European Union,in its North Sea water territory.

It has strong shipbuilding, coal mining and steel industries.

It has an unemployment rate lower than the majority of EU countries.

It has an adult literacy rate of over 99%.

It exports to the United States and the European Union which constitute their largest markets for the country's exports.

Here are a few Scottish stocks which trade in the United States, and that are worth checking out:

Scottish Power plc (SCPWF.PK), based in Glasgow, Scotland, provides electricity throughout the United Kingdom. It is a leading developer and operator of renewable energy in both the U.K. and the U.S., in addition to being one of the largest providers of wind energy in the United States. The stock's ADRs used to trade on the New York Stock Exchange, but like many foreign companies around the world, the company has dropped its NYSE listing of its ADRs for cost savings. The P/E is a low 9.4, and the P/S is 2. It has a yield of 3%, which it has historically paid four times a year.

HBOS plc ADR (HBOOY.PK) is a banking and insurance group based in Edinburgh, Scotland. It is the result of the merger of Halifax plc, and the Bank of Scotland. It has a forward P/E of 8.8, and a yield of 3.9%.

Scottish & Southern Energy plc ADR (SSEZY.PK) is the third largest supplier of electricity, and natural gas in the United Kingdom. The stock has a forward P/E of 15, and a PEG of 1.5.

Royal Bank of Scotland (PBSPY.PK) is based in Edinburgh, Scotland, and trades on the New York Stock Exchange. It was founded in 1727, is the second largest bank in Europe, and still prints its own banknotes. Its net profits for 2006 were up 15%, on a 10% increase in total revenues.

Disclosure: The author does not own any of the above.