Some 1.25 million people die in road accidents according to the WHO. Developing and Frontier countries have much higher traffic road death rates than the developed world. High speed and lack or enforcement of road safety laws are some of the factors that lead to unnecessary death and injuries in those countries.
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Source: Global status report on road safety 2015, WHO
U.S. investors looking for foreign dividend stocks can find interesting opportunities in the British equity market. British stocks offer many advantages for American investors especially with respect to dividend withholding taxes. Unlike many other developed and emerging countries, the UK does NOT deduct withholding taxes on dividend payments from UK corporations to US investors. However a 20% tax will be withhold for dividends paid out by UK REITs.
Many large cap British firms in the FTSE 100 index derive high portion of their revenues from overseas markets. For example, mining firms mostly earn most of their revenues from countries outside of the UK. However due to the ongoing chaos in the commodity market mining stocks can be avoided. Some of the sectors that US investors can consider for hunting dividend payers include insurance, utilities, consumer discretionary, telecom, etc. Electric utilities for example are logical to own because they earn most of its revenues from consumers in the UK.
I came across an interesting article by Lee Wild at the UK-based equity trading firm Interactive investor that discussed the safest and riskiest dividend stocks in the FTSE 100. From the article:
Dividend income is still one of the biggest shows in town, and above-inflation increases in the annual payout are highly prized. It’s down to record low interest rates which make generating anything like decent income from other liquid asset classes incredibly difficult. But not all blue chip dividends are safe. In fact, some are downright dangerous.
We’ve put together a colour-coded graphic (see below) which includes every FTSE 100 (UKX) company currently yielding 4% or more. It’s accompanied by some relevant data (bottom of the article), which together give us a pretty good clue whether dividends are sustainable, and who might be next to cut, or even scrap the payout.
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We’ve included dividend cover as a key measure of affordability, of course. It tells us how many times a company can pay its dividend from profits, and is probably the first measure investors look at when judging a company’s ability to return cash to shareholders. Anything less than 1.5 times may cause sleepless nights.
Then there’s the payout ratio – the percentage of earnings paid out to shareholders as dividends. A figure of around 60% would be considered attractive, but a drop in profits may mean some companies pay out 100% or more. That implies they’re borrowing to keep dividend seekers happy, which is not a long-term solution.
It’s worth looking at return on equity (ROE), too. It shows how much a company makes with each pound of shareholders’ equity. But while it can be useful, the measure might not always tell us the whole truth. Either writing down assets, or raising debt would reduce book value, increasing ROE.
That’s why a lot of professional investors use cash return on capital invested (CROCI). It’s a valuation multiple which calculates how much free cash flow per pound is generated by the company from invested capital. It removes non-cash items like depreciation and amortization, and tells us a lot about management performance and how strong the underlying business is. Again, a higher ratio is better.
Color Coding in Chart: Red means dividend is in danger and green means safety.
Source: FTSE 100’s safest and riskiest dividends named, Interactive Investor Ltd, Nov 27, 2015
NOTE: The Dividend Yields noted above are for the common equity traded on the domestic market (i.e. they do not represent the yields on ADRs).
Some of the British stocks from the above chart that trade on the US markets are listed below with their current dividend yields:
1.Company: British American Tobacco PLC (BTI)
Current Dividend Yield: 3.99%
Sector:Tobacco
2.Company: United Utilities PLC (UUGRY)
Current Dividend Yield: 3.96%
Sector: Water Utilities
3.Company: BAE Systems (BAESY)
Current Dividend Yield: 4.07%
Sector: Aerospace and Defense
4.Company: Aviva PLC (AV)
Current Dividend Yield: 3.82%
Sector: Insurance
5.Company: Imperial Tobacco PLC (ITYBY)
Current Dividend Yield: 1.97%
Sector:Tobacco
6.Company: National Grid PLC (NGG)
Current Dividend Yield: 4.73%
Sector: Multi-Utilities
7.Company: Legal & General PLC (LGGNY)
Current Dividend Yield: 4.36%
Sector: Insurance
8.Company: Vodafone Group PLC (VOD)
Current Dividend Yield: 5.17%
Sector: Wireless Telecom
9.Company: GlaxoSmithKline (GSK)
Current Dividend Yield: 5.96%
Sector: Pharmaceuticals
10.Company: AstraZeneca PLC (AZN)
Current Dividend Yield: 4.11%
Sector: Pharmaceuticals
Note: Dividend yields noted above are as of Nov 27, 2015. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.
Disclosure: No Positions
The World Diabetes Day was on November 14.Diabetes affects millions of people worldwide. According to The International Diabetes Association, total population affected by diabetes is high enough to make it the third most populous country behind China and India. This shocking statistic shows the scale of this disease. Diabetes is becoming a growing epidemic in many emerging countries as the food habits and lifestyle of the population change due to rising income levels and standard of living.
The infographic below shows some interesting facts about this disease:
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Global health spending to treat diabetes and manage its complications was estimated at 612 billion dollars in 2014. That figure is set to explode if diabetes continues its epidemic growth. There may not be a cure for diabetes right now, but it can be dramatically reduced and even prevented by adopting a healthier lifestyle. However, a nutritional diet filled with fresh fruits and vegetables, whole grains and lean meat is not always financially possible; particularly for people living in middle- and low-income countries.
Source: A sustainable diet, Allianz
It is not surprising that Diabetes is a huge market opportunity for pharmaceutical companies. The top company in terms of 2014 sales for curing diabetes is Denmark-based Novo Nordisk(NVO). The other major players in the global top five companies are: Sanofi(SNY), Merck(MRK), Eli Lilly(LLY) and Astrazeneca(AZN)
Related:
Disclosure: No Positions
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Kremlin Palace Hotel, Antalya, Turkey
Photo courtesy of: Deutsche Welle
The New York Stock Exchange(NYSE) is delisting National Bank of Greece(NBG) after its price fell to $0.16 today. On Thursday it had closed at $0.19. So finally its time to say goodbye to NBG. On Nov 21, I had written a post suggesting investors avoid the stock after a decision to implement a reverse 1:15 split.
From a Bloomberg news report today:
The New York Stock Exchange is delisting American depositary receipts of National Bank of Greece SA after they lost 91 percent of their value this year.
The ADRs were suspended on Friday, when their value slumped to 16 cents from as much as $1.96 in February. NYSE cited an “abnormally low” price in a statement.
Losses spiraled to a record this month, after the Greek lender sold new shares at a more than 90 percent discount to market prices. The nation’s four largest banks have been raising capital to help fill a 14.4 billion-euro ($15.3 billion) hole in their accounts identified by the European Central Bank.
Source: NYSE Is Delisting National Bank of Greece After 91% Plunge, Bloomberg, Nov 27, 2015
The ADR was first listed on the NYSE in Oct, 1999.
Now that NBG is being delisted what should you do if you hold the stock?.
There may be some options. For more details on what to do next check out: What to do when an ADR is delisted from NYSE or NASDAQ
Earlier:
Disclosure: No Positions
