In this post, let's take a quick look at the top foreign stocks traded on the New York Stock Exchange. Last year when I wrote an article with the same title, there were 21 foreign ADRs. Many of them were bank stocks such as Barclays (BCS) , ING (ING), etc. The world of banking looks a lot different now after the credit crunch.

Traditionally foreign stocks have paid higher dividends than their US peers despite taking into consideration factors such as taxes, foreign exchange, transaction costs, etc. To identify the top dividend ADR stocks, I ran the stock screener with the following criteria:

The Dow Jones Utilities Titans 30 Index represents 30 leading companies in the global utilities sector. These stocks are selected based on “rankings by float-adjusted market capitalization, revenue and net profit.”

Generally considered as defensive plays, utility stocks offer consistent yields and stable long-term growth. However this year the sector is under-performing other sectors. For example, the S&P 500 is up 10.13% for the year as of September 2nd. The IT components in the index are up a cool 35.88% year-to-date (YTD). But the utility components are the second worst performers with a loss of 1.94% YTD.

To identify the large cap foreign stocks on the NYSE with current dividend yields of 5% or higher, I ran the following screen:

Exchange: NYSE
Market Capitalization: ≥ $50.0B
Dividend Yield :≥ 5.00%

Earlier this month, The Wall Street Journal had an interesting piece on the challenges — and opportunities — facing income investors. Dividend payouts have dropped dramatically since the market made its big declines last year, with second-quarter S&P 500 dividends coming in $14.3 billion lower than they were a year ago — the largest drop in more than 40 years. June dividends alone for the index were down $6.6 billion, the largest drop on record, the Journal’s Tom Lauricella reports.

But there’s another side of the coin: “Dividends are down,” S&P’s Howard Silverblatt told the Journal, “but the market is down more.” And that means that yields are up, with the S&P yield almost 2.5% this month, versus less than 2% two years ago.

I ran the stock screen to identify the largest integrated oil companies traded on the New York Stock Exchange with a market cap > $50B and dividend >=5%. The following four oil majors matched the condition:

1. BP Plc (BP)
Country: UK
Current Yield: 6.54%

Higher Oil Prices Are Caused By:

• A Weaker U.S. Dollar
• Competition from Alternative Transportation Fuels
• Supply: Opec's Production Quotas and the Inventory of Crude Oil
• Demand: The Pace of the Global Recovery
• Speculation and Hoarding

What Is a Realistic Price of a Barrel of Oil?

As posted in my blog, historically oil and gas both peak in the summer months. As we can see from last year's chart, oil peaked in mid July.

What does the past week’s market activity tell the high dividend income investor who is considering taking new long positions to get some return on cash that’s lying fallow? What follows is nothing fancy, people. Just a simple follow up and update to last week’s post Notes on a Scandal: High Dividend Investor's Survival Guide to This Unsustainable Rally, and some practical tips on what to do now.

Caveat: I’m not a prophet. The following conclusions are just based on the evidence I present below that this is not the time for new long positions. I’m still innocently (naively?) assuming we have a free, open and transparent market operating. However, given the degree of market manipulation we’ve seen (see Notes on a Scandal: High Dividend Investor's Survival Guide to This Unsustainable Rally) and mentioned in recent posts, one could argue otherwise and try to bet on a continuing rally aided and abetted, legally or not, by team Washington & Wall Street.

MarketWatch recently had an interesting piece on contrarian investment strategies, highlighting the fact that many of the contrarian managers who were hit hard last year are now netting some strong bounce-back gains.

"As the market has bounced back in recent weeks, [several] contrarian-style funds, with their bargain-minded ways, have been outperforming," writes MarketWatch's Sam Mamudi, discussing well-known contrarian managers like David Dreman, Bill Miller, and Marty Whitman.

At the end of each trading week, Hillbent scans the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our Market Condition Summary to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

For dividend income investors not familiar with options, here are some simple ideas you should consider for getting higher yields with little or no additional risk.

This article is intended purely to introduce some simple, conservative options strategies for both decreasing risk and increasing income. Dividend investors, who are often unfamiliar with options, can then decide if these are worth further investigation. Readers will need to do more homework before implementing these strategies, and stay tuned for follow-up articles.

Here I'll briefly review the stocks that help you avoid the Seven Deadly Sins of Income Investors.

Investors and global oil companies such as Shell Petroleum (RDS.A), Eni (E), China National Petroleum, and Exxon Mobile (XOM) who are betting on Iraq are surely to be disappointed.

Ever since the fall of Baghdad in April 2003, we have heard about the unlimited potential for the Iraqi oil, often news reports would mention that Iraq has the 3rd largest oil reserves in the world and the country oil ministry often mentions its goal of having Iraq produce 6 million barrels of oil over the medium term.

Many stocks in the oil, gas and utility sectors have attractive dividend yields at current prices. Six of them are listed below with their current yields. Though they may fall further due to volatile market conditions, they are definitely worth looking into for potential long-term investment opportunities.

1. ENI SPA (E)
Country: Italy
Sector: Oil & Gas - Integrated
Dividend Yield: 8.43%

Before ever considering investing in stocks, we must always first look at the overall market, since almost all stocks follow the major indices.

A. The Short Version

As anticipated in my last post, a bit of good news has brought a rally, though it has yet to really test significant resistance. The fundamental problems remain and there is no credible plan to fix them at this time. News driven and remains unpredictable.

<<< Read part 1

<<< Read part 2

MARKET STATUS

Before continuing to examine the case for the U.S. Dollar and how high yield stock investors can hedge it while getting high yields, we first must look at the overall market, since almost all stocks follow the major indices.

High-yield stocks are a form of cash. Thus inflation eats away at both yield and principle. As governments inflate their money supply to ease credit, most oberservers believe inflation is inevitable.

Like many developing nations with vast natural resources, Nigeria has seen a massive influx in Foreign Direct Investment [FDI], particularly in the energy sector. However, civil unrest, particularly in the Niger Delta, may be a catalyst for potential investors to look to other West African Nations as investment opportunities. Added to this are the ever present problems of ineptitude & “graft” within both state & federal government, which has brought some unwelcome news for Africa’s largest economy.

Last week, Russian giant Gazprom (OGZPY.PK) announced that it was in discussions to inject up to $2.5 Bn into a joint venture enterprise with state owned Nigerian National Petroleum Corp [NNPC], with a view to developing domestic gas production, processing, and transportation. Nigeria has an estimated 187 trillion cubic feet of natural gas reserves. Industry experts see the deal as a positive move by the federal government to utilize the country’s huge gas resources that have hitherto been wasted, it is estimated that Nigeria flares off as much as 14% (24 billion cubic feet) of global gas wastage.