For several months now, I have been able to put together lists of top international stocks mostly sorting them in terms of dividend yields. We did take a deeper look at some of those names in greater detail such as Vodafone (VOD, Financial) while also adding a stock with great international exposure in Aflac (AFL) to both the Ultimate Sustainable Dividend Portfolio and one of the 4 stocks that I picked in this year’s stock stock picking competition. I’ve written about a critical aspect of dividend investing in the past which are more critical than ever when looking at international dividend stocks:
-looking beyond dividend yield
If you take a deeper look at the top dividend yields for international stocks you will see a very strong trend for European stocks that are coming out near the top of those rankings. That is a group of stocks that I am personally very prudent before buying. Why? Mainly these reasons:
As you can see, there are no miracle, 10% or 15% dividend yield stocks but there are several other high quality candidates, which you can see here:
-looking beyond dividend yield
If you take a deeper look at the top dividend yields for international stocks you will see a very strong trend for European stocks that are coming out near the top of those rankings. That is a group of stocks that I am personally very prudent before buying. Why? Mainly these reasons:
European Chaos:
-Europe seems to be nearing a cliff in many different ways with Greece and other nations in serious trouble. One of the big results has been a very difficult time for companies operating there, especially banks located in countries such as Greece and Spain. Citizens in those countries have been increasingly worried about what will happen and continued to move their assets to foreign banks, especially in Germany. Thus, I would not be buying dividend stocks of such banks even if they offer great dividend yields.European Telecoms:
-While there are also many concerns about many of these companies which have been at the top of previous international rankings but also US ones (with FTR at the very top), many of these companies pay high dividends that are unfortunately not sustainable. I think it’s critical to consider the long term perspectives for these companies before starting to buy them, as I had done when looking into Vodafone (VOD).When It’s Too Good To Be True…
Look at the rankings and you will see the very top dominated by YPF SA, an Argentina-based oil company which is stuck in the middle of huge changes. It remains unclear how the company will be able to keep operating on a private basis and pay reliable, sustainable dividends. Why? The Argentinian government is actually taking over the company. How will it impact shareholders? That remains to be seen. You can see some posts about it on Marketwatch for example. Personally I’m staying away:)As you can see, there are no miracle, 10% or 15% dividend yield stocks but there are several other high quality candidates, which you can see here:
Ticker | Name | Industry | Price | Dividend Yield | Payout Ratio |
---|---|---|---|---|---|
YPF | YPF SA | Oil Comp-Integrated | 12.45 | 26.88 | N/A |
PT | Portugal Telecom SGPS SA | Telephone-Integrated | 4.5 | 15.75 | 400.5 |
STD | Banco Santander SA | Consumer Banks | 5.79 | 15.59 | 99.45 |
BMA | Banco Macro SA | Consumer Banks | 13.95 | 14.93 | N/A |
EC | Ecopetrol SA | Oil Comp-Integrated | 59.24 | 14.81 | 38.58 |
FTE | France Telecom SA | Telephone-Integrated | 13.18 | 13.53 | 95.21 |
NZT | Telecom Corp of New Zealand Ltd | Telecom Services | 9.96 | 11.93 | 211.25 |
AV | Aviva PLC | Life/Health Insurance | 8.68 | 11.66 | 102.73 |
IRS | IRSA Inversiones y Representaciones SA | Real Estate Oper/Develop | 7.41 | 11.59 | N/A |
PVD | Administradora de Fondos de Pensiones Provida SA | Investment Companies | 78.31 | 10.47 | N/A |
VIP | VimpelCom Ltd | Telecom Services | 8.68 | 9.59 | 221.72 |
AZN | AstraZeneca PLC | Medical-Drugs | 41.62 | 9.37 | 36.84 |
GFA | Gafisa SA | Real Estate Oper/Develop | 2.53 | 8.99 | N/A |
BSI | Alon Holdings Blue Square Israel Ltd | Food-Retail | 2.7 | 8.95 | 126.02 |
TEF | Telefonica SA | Telephone-Integrated | 12.55 | 8.33 | 135.16 |
WBK | Westpac Banking Corp | Consumer Banks | 101.94 | 8.25 | 67.27 |
BBVA | Banco Bilbao Vizcaya Argentaria SA | Consumer Banks | 6.28 | 7.72 | 68.55 |
TI/A | Telecom Italia SpA | Telephone-Integrated | 7.51 | 7.67 | N/A |
NGG | National Grid PLC | Gas-Distribution | 52.84 | 7.63 | 68.81 |
CTEL | City Telecom HK Ltd | Telecom Services | 10.3499 | 7.09 | 73.71 |
TEO | Telecom Argentina SA | Telephone-Integrated | 12.48 | 7.05 | N/A |
SFUN | SouFun Holdings Ltd | Internet Content-Info/Ne | 14.3 | 6.85 | 0 |
CPL | CPFL Energia SA | Electric-Integrated | 23.95 | 6.83 | 81.08 |
TLK | Telekomunikasi Indonesia Persero Tbk PT | Telecom Services | 33.76 | 6.67 | N/A |
BCA | Corpbanca | Consumer Banks | 18.98 | 6.49 | N/A |
SID | Cia Siderurgica Nacional SA | Steel-Producers | 6.68 | 6.46 | 25 |
VE | Veolia Environnement SA | Water | 12.18 | 6.43 | N/A |
ENL | Reed Elsevier NV | Publishing-Books | 21.96 | 6.42 | 69.79 |
RUK | Reed Elsevier PLC | Publishing-Periodicals | 31.26 | 6.42 | 66.58 |
AWC | Alumina Ltd | Metal-Aluminum | 3.74 | 6.36 | 115.64 |
SNP | China Petroleum & Chemical Corp | Oil Comp-Integrated | 91.21 | 6.21 | 35.52 |
ATAI | ATA Inc/China | Computer Software | 6.81 | 6.02 | 0 |
BTI | British American Tobacco PLC | Tobacco | 96.13 | 5.94 | 80.1 |
BAK | Braskem SA | Petrochemicals | 10.89 | 5.92 | N/A |
TOT | Total SA | Oil Comp-Integrated | 44.39 | 5.88 | 43.9 |
EOC | Empresa Nacional de Electricidad SA/Chile | Electric-Integrated | 47.8 | 5.72 | N/A |
APSA | Alto Palermo SA | Real Estate Mgmnt/Servic | 14.97 | 5.7 | N/A |
E | ENI SpA | Oil Comp-Integrated | 40.14 | 5.47 | 52.8 |
FBR | Fibria Celulose SA | Paper&Related Products | 6.53 | 5.17 | N/A |
FLY | Fly Leasing Ltd | Transport-Equip&Leasng | 12.43 | 5.15 | 1886.38 |
BP | BP PLC | Oil Comp-Integrated | 37.85 | 5.07 | 16.9 |
TMX | Telefonos de Mexico SAB de CV | Telephone-Integrated | #N/A N/A | 5.06 | N/A |
PUK | Prudential PLC | Life/Health Insurance | 21.64 | 5 | 43.09 |
PSO | Pearson PLC | Multimedia | 18.13 | 4.99 | 35.21 |
GSK | GlaxoSmithKline PLC | Medical-Drugs | 44.43 | 4.94 | 71.43 |
TI | Telecom Italia SpA | Telephone-Integrated | 9.31 | 4.93 | N/A |
CRH | CRH PLC | Bldg Prod-Cement/Aggreg | 18.17 | 4.92 | 76.16 |
CHT | Chunghwa Telecom Co Ltd | Telecom Services | 30.8 | 4.88 | 90 |
ENI | Enersis SA | Electric-Integrated | 17.84 | 4.86 | N/A |
CIG | Cia Energetica de Minas Gerais | Electric-Integrated | 16.94 | 4.56 | 87.97 |