What Stocks To Buy As The Market Crumbles

Global stocks fell heavily across the board yesterday.Panic selling in the markets usually presents buying opportunities. Investors looking to deploy capital during uncertain times can buy high-quality dividend-paying stocks at cheap prices.

Some of the reasons for investing in dividend-paying stocks are listed below:

  • 90% of the U.S. equity returns in the past century has been delivered by dividends and dividend growth.
  • Dividend payers usually have superior returns than non-payers as shown in the chart below:


  • Since 1970, more than 80% of European returns have come from a combination of yield and real dividend growth.
  • Over the past 30 years, well over 90% of UK, Germany and France returns have come from dividends and dividend growth according to research by Societe Generale.
  • Globally, high-dividend-yield and high-dividend-growth stocks have consistently outperformed the broad market while also handily outpacing simple high yield stocks as shown in the graph below:

  • Foreign dividend stocks have consistently higher yields than U.S. stocks.
  • In low-growth environments such as the one we are in now, high-yielding stocks have traditionally outperformed.

Source: Why Dividends Make A Difference, Blackrock

Ten randomly selected foreign stocks yielding more than 5% dividends are listed below for further research:

1.Company:Empresa Nacional de Electricidad SA (EOC)
Current Dividend Yield: 6.75%
Sector:Electric Utilities
Country: Chile

2.Company:National Grid PLC (NGG)
Current Dividend Yield: 6.01%
Sector:Electric Utilities
Country: UK

3.Company:Cpfl Energia SA (CPL)
Current Dividend Yield: 5.66%
Sector:Electric Utilities
Country: Brazil

4.Company:Telstra Corp Ltd (TLSYY)
Current Dividend Yield: 8.87%
Sector: Telecom
Country: Australia

5.Company:Aviva PLC (AV)
Current Dividend Yield: 7.22%
Sector: Life Insurance
Country: UK

6.Company:City Telecom (HK) Ltd (CTEL)
Current Dividend Yield: 7.21%
Sector: Telecom
Country: Hong Kong

7.Company: Philippine Long Distance Telephone Co(PHI)
Current Dividend Yield: 6.49%
Sector: Telecom
Country: Philippines

8.Company:Allianz Se (AZSEY)
Current Dividend Yield: 5.72%
Sector: Life Insurance

9.Company:Stora Enso Oyj (SEOAY)
Current Dividend Yield: 5.17%
Sector:Paper & Paper products
Country: Finland

10.Company:Gdf Suez SA (GDFZY)
Current Dividend Yield: 6.99%
Sector: Electric Utilities
Country: France

Note: Dividend yields noted above are as of market close August 8, 2011

Disclosure: No Positions

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