A few months ago, I had put together a list of the top international stocks that did prove to be very popular. I believe very strongly in adding international stocks to any dividend portfolio. That does not however require opening accounts in foreign countries and trying to trade in all kinds of exotic currencies. In fact, most of the largest companies around the world, no matter where they are based, have stock trading on U.S. markets. Some are only available through pink sheets, which is a whole other story. In most cases though, companies such as Credit Suisse (CS), France Telecom (FTE), GlaxoSmithKline (GSK) and Vodafone (VOD), which we reviewed recently, are very easy to trade in the U.S.
Another option of course is to add U.S.-based stocks that have a large portion of their activity outside of the country, such as Aflac (AFL), which I picked as part of the stock picking competition and also recently added to the Ultimate Sustainable Dividend Portfolio.
One important aspect about adding international dividend payers is that in some countries, companies end up waiting to see their yearly results to pay out dividends. This practice has benefits and downsides.
Benefits
- strong dividends in general as companies do not feel the pressure that dividend aristocrats feel for example
- management incentives to maximize profits (and thus dividends)
- healthier for the company as it pays what it can afford to pay
Downsides
- Less reliable (these companies can reduce their payouts at any moment)
So today, I wanted to present, among the group of foreign-based stocks that I follow, those that pay out the top dividend yield. Let’s start off that way:
| Ticker | Name | Price | Dividend Yield | Payout Ratio |
|---|---|---|---|---|
| BFR | BBVA Banco Frances SA | 5.92 | 18.15 | N/A |
| YPF | YPF SA | 22.93 | 14.63 | N/A |
| EC | Ecopetrol SA | 62.49 | 14.26 | N/A |
| STD | Banco Santander SA | 6.7 | 13.68 | 99.45 |
| FTE | France Telecom SA | 13.74 | 12.98 | 95.21 |
| BMA | Banco Macro SA | 17.79 | 11.7 | N/A |
| NZT | Telecom Corp of New Zealand Ltd | 10.39 | 11.44 | 211.25 |
| TEF | Telefonica SA | 15.36 | 10.98 | 135.15 |
| AV | Aviva PLC | 10.04 | 10.08 | 102.73 |
| VE | Veolia Environnement SA | 14.82 | 9.93 | N/A |
| IRS | IRSA Inversiones y Representaciones SA | 9.16 | 9.4 | N/A |
| AZN | AstraZeneca PLC | 45.03 | 8.66 | 36.84 |
| VIP | VimpelCom Ltd | 10.75 | 7.74 | 124.32 |
| PT | Portugal Telecom SGPS SA | 4.98 | 7.69 | 329.79 |
| TLK | Telekomunikasi Indonesia Persero Tbk PT | 32.97 | 7.13 | N/A |
| BBVA | Banco Bilbao Vizcaya Argentaria SA | 7.14 | 6.94 | 68.55 |
| WBK | Westpac Banking Corp | 115.76 | 6.86 | 67.27 |
| SID | Cia Siderurgica Nacional SA | 9.34 | 6.82 | 25 |
| BSI | Alon Holdings Blue Square Israel Ltd | 3.7 | 6.53 | N/A |
| BAK | Braskem SA | 15.8 | 6.51 | N/A |
| TEO | Telecom Argentina SA | 17.27 | 6.41 | N/A |
| HBC | HSBC Holdings PLC | 43.75 | 6.4 | 45.14 |
| TI.A | Telecom Italia SpA | 9.05 | 6.36 | N/A |
| ENL | Reed Elsevier NV | 24.55 | 6.08 | 69.79 |
| BCA | Corpbanca | 20.45 | 6.02 | N/A |
| RUK | Reed Elsevier PLC | 34.29 | 5.93 | 66.58 |
| CTEL | City Telecom HK Ltd | 12.37 | 5.92 | 73.71 |
| CPL | CPFL Energia SA | 29.57 | 5.87 | 81.08 |
| ATAI | ATA Inc/China | 6.98 | 5.87 | 0 |
| GSK | GlaxoSmithKline PLC | 45.47 | 5.84 | 71.43 |
| BTI | British American Tobacco PLC | 101.02 | 5.48 | 80.1 |
| SFUN | SouFun Holdings Ltd | 18.42 | 5.32 | 0 |
| TOT | Total SA | 49.04 | 5.32 | 43.9 |
| SNP | China Petroleum & Chemical Corp | 107.94 | 5.25 | 35.52 |
| BCS | Barclays PLC | 14.33 | 5.23 | 24.21 |
| FLY | Fly Leasing Ltd | 12.33 | 5.18 | 1886.38 |
| GFA | Gafisa SA | 4.5 | 5.07 | N/A |
| TMX | Telefonos de Mexico SAB de CV | #N/A N/A | 5.06 | 64.92 |
| APSA | Alto Palermo SA | 16.9 | 5.05 | N/A |
| E | ENI SpA | 43.6 | 5.03 | 52.8 |
| CHT | Chunghwa Telecom Co Ltd | 30.6 | 4.91 | 90 |
| PSO | Pearson PLC | 18.21 | 4.91 | 35.21 |
| AWC | Alumina Ltd | 5 | 4.77 | 423.12 |
| HNP | Huaneng Power International Inc | 22.71 | 4.75 | 59.53 |
| CRH | CRH PLC | 20.07 | 4.72 | 76.16 |
| MBT | Mobile Telesystems OJSC | 18.3 | 4.7 | 71.79 |
| PUK | Prudential PLC | 23.61 | 4.59 | 43.09 |
| BP | BP PLC | 42.96 | 4.47 | 16.9 |
| TNE | Tele Norte Leste Participacoes SA | 10.99 | 4.38 | 23.75 |
| CIG | Cia Energetica de Minas Gerais | 25.37 | 4.26 | 87.97 |
Clearly, as I say every month, having the top dividend yield is not enough. In fact, it’s rarely a good sign:) So let’s dig a bit deeper. I took all of those names and looked for companies that have increased dividends and sales by 5% or more annually over five years with a dividend yield of 5% or more. Then, I removed companies that have a payout ratio over 75%. Guess how many names I have left? Just five:)
| Ticker | Name | Price | Dividend Yield | Payout Ratio |
|---|---|---|---|---|
| SID | Cia Siderurgica Nacional SA | 9.34 | 6.82 | 25 |
| SNP | China Petroleum & Chemical Corp | 107.94 | 5.25 | 35.52 |
| WBK | Westpac Banking Corp | 115.76 | 6.86 | 67.27 |
| MBT | Mobile Telesystems OJSC | 18.3 | 4.7 | 71.79 |
| TOT | Total SA | 49.04 | 5.32 | 43.9 |
What are your thoughts on these? I will certainly take a deeper look but I thought it was quite interesting:)
