Latin American equity markets offer some of the best emerging market equity opportunities after Emerging Asian markets. Economies in the region are mainly driven by natural resources or agricultural commodities. With a thriving middle class and relatively closer proximity to North America, investors can find plenty of unique companies. For instance, one of the sectors to consider is the the banking sector. Another is the oil industry that offers relatively attractive stocks. Though many Latin countries were severely impacted by Covid-19 and some are still struggling contain the virus, from the vaccination standpoint Chile is leading the continent. According to NY Times data, Chile is the fourth most vaccinated country in the world after the U.K. 26% of the population has been vaccinated with at least one dose. Brazil’s healthcare system is under immense pressure due to soaring Covid cases and deaths but it should eventually subside just like in so many other countries including the US.
From an investment perspective, Chile and Mexico equities are already performing very well so far this year. Chile’s IPSA index is up over 17% and Mexico’s IPC has increased by 8%. Mexico has benefitted from reopening of the manufacturing and potential growth of the tourism sectors. Soaring copper prices have led to the Chilean economy’s strong growth.
With that brief overview, the following are five Latin American stocks investors can consider for further research and analysis:
1.Company: Bancolombia SA . (CIB)
Current Dividend Yield: 4.42%
Sector: Banking
Country: Colombia
2.Company: Ecopetrol SA(EC)
Current Dividend Yield: 6.74%
Sector: Oil
Country: Colombia
Ecopetrol has grown by only 2.8% year-to-date. The firm has put forth its proposal for the dividend distribution in the Annual Shareholder Meeting to be held on March 26th.
3.Company: Petrobras (PBR)
Current Dividend Yield: 3.32%
Sector: Oil
Country: Brazil
PBR declined heavily recently after President Bolsonaro replaced the market-friendly CEO with a military general with industry experience. Despite the political risk, PBR is attractive relative to other major oil firms since the stock has crashed while global crude oil prices have jumped by over 50%.
4.Company: Azul (AZUL)
Current Dividend Yield: No Dividend paid
Sector: Airline
Country: Brazil
5.Company: Credicorp Ltd (BAP)
Current Dividend Yield: 3.97%
Sector: Banking
Country: Peru
Notes:
1.Dividend yields noted above are as of Mar 12, 2021. Data is known to be accurate from sources used. Please use your own due diligence before making any investment decisions.
2.Dividend Withholding Taxes will reduce dividend yields shown above.
3.In addition, ADR fees may also apply.
Disclosure: Long EC, PBR
