Going Global For Dividend Stocks

US stocks generally tend to have lower dividend yields than many foreign countries. For example, the yield on the S&P 500 has stayed around 2% for many years now. Investors looking to find higher dividend yields can look overseas. For example, in some countries such as Chile companies are required by law to payout a certain percentage of their earnings as dividends to shareholders.

Investors searching for higher yields and are willing to venture abroad can find a rich hunting ground. The following ten stocks with dividend yields higher than 2%:

1.Company: Banco de Chile (BCH)
Current Dividend Yield: 4.14%
Sector:Banking
Country: Chile

2.Company:Banco Santander- Chile (BSAC)
Current Dividend Yield: 4.79%
Sector: Banking
Country: Chile

3.Company: Telstra Corp Ltd (TLSYY)
Current Dividend Yield: 6.30%
Sector:Telecom
Country:  Australia

4.Company: National Grid PLC (NGG)
Current Dividend Yield: 4.96%
Sector: Multi-Utilities
Country: UK

5.Company: Singapore Airlines Limited (SINGY)
Current Dividend Yield: 4.67%
Sector: Airlines
Country: Singapore

6.Company: BCE Inc (BCE)
Current Dividend Yield: 4.61%
Sector: Telecom
Country: Canada

7.Company: Westpac Banking Corp (WBK)
Current Dividend Yield: 6.06%

Sector:Banking
Country: Australia
8.Company: Banco Latinoamericano de Comercio Exterior SA (BLX)
Current Dividend Yield: 5.75%
Sector: Banking
Country: Panama

9.Company: Nordea Bank AB (NRBAY)
Current Dividend Yield: 7.17%
Sector: Banking
Country: Sweden

10.Company: ING Groep NV (ING)
Current Dividend Yield: 5.63%
Sector: Banking
Country: The Netherlands

Note: Dividend yields noted above are as of Nov 4, 2016. Data is known to be accurate from sources used. Please use your own due diligence before making any investment decisions.

Disclosure: ING, WK, BCH

Who can Fool More of the People for More of the Time

Every four years elections are held to elect a President. However there many fundamentals flaws with the way this process is setup one of which is the unique and mysterious electoral system. I came across an interesting articles this weekend on why the US election may present a good opportunity to buy US stocks. From an article by Rowan Dartington’s Guy Stephens at FE Trustnet:

What marks this US election out as extraordinary is that both candidates already have enough revealed skeletons to fill a cemetery, and the really scary thing is that the victor will lead the most powerful nation in the world.

In most open democracies, neither candidate would have even made the starting blocks. No wonder Jeremy Paxman delivered a documentary the other week asking the question as to how the US electoral system has produced two of the most hated candidates in history.

This is why you cannot rule out Trump because the choice literally is between an apparent sexist bigot and an establishment figure with suspected acts of dishonesty with regard to confidential matters of state. Neither scores highly on the ‘fit to govern’ scale.

One feature that should be at the forefront of many voters’ minds is how that individual will represent the country on the world stage as an international statesman/woman.

However, we are all aware of how introspective the typical US citizen can be and so perhaps it is no surprise that the US voter doesn’t appear reviled like much of the rest of the world.  Arguably, this is where Theresa May scores highly compared to Jeremy Corbyn.

There is also little doubt as to how Angela Merkel of Germany, Francois Hollande of France, Shinzo Abe of Japan and Xi Jinping of China rank in terms of international charismatic leaders.

Regardless of one’s political persuasion the likes of Margaret Thatcher and Tony Blair commanded great respect on the world stage and raised the profile of the UK above our natural ranking. The US electoral system has jettisoned all the worthy alternatives in this area which is odd.

In many other democracies the voters choose the party and the party members select their leader – in the US the voter is choosing the president based on simplistic measures watered down for the public and it really is a case of who can fool more of the people for more of the time rather than far more complex and unknown issues only fully understood within the walls of Congress.

When US citizens are interviewed as to which way they are going to vote, they say Trump or Clinton, not especially Democrat or Republican. In the UK, we vote for the party and consider their policies, with far less emphasis on the prime minister.

Promoting either of these US candidates to this elite club, in the most powerful position on the world state beggars belief and credibility for the US as a nation. An election should be about the party and its policies, not one individual and what a choice!

Source: Why investors will need cash after a Clinton or Trump victory, FE Trustnet

From A tale of two Americas by Varghese K.George at The Hindu:

Three months after Reagan made his Berlin speech, on September 2, 1987, Mr. Trump — then a 41-year-old real estate tycoon — made his first move that could be called political. He took out an advertisement in the New York papers on the “stupidity” of American politicians and spoke to CNN’s Larry King in an interview. What he said proves that what has not changed in the last 30 years are Mr. Trump’s world view, words, and style.

He told Mr. King: “Looking at our own stupidity, other countries are laughing at us. This is a great country. But we have stupid leaders… The country is losing $200 billion a year [in trade deficit]… Japan, Saudi Arabia… these are countries that would be wiped off the face of the earth if it were not for the U.S.A. This country will go bust in a couple of years. Japan and all these countries must pay for protection.” He was asked whether America should protect its trade through protectionist policies or by making its businesses more competitive. “There is no free trade in the world, it is virtually impossible for an American company to go and do business in Japan or Saudi Arabia. In the meantime Japan is coming to this country and buying up all of Manhattan,” he said. He added: “Our farmers are dying, the homeless are all over the streets of our cities… We give so much money to the wealthiest countries of the world, but we can’t take care of our own people — the poor, the sick, homeless, the farmers, those people we are not helping.”

Source: A tale of two Americas, The Hindu

The full article is worth a read.

Performance Of US Stock Market After Heavy One Day Declines

The US stock market as measured by the S&P 500 Index has fallen for nine days in a row due to the uncertainty over US elections. According to a journal article this is the longest losing streak for the index since 1980. Market participants are griped by fears of Trump winning the race or launching a legal battle if Clinton wins.

Should Trump win the election, the current prediction among experts is that stocks may crash on the day after the election with estimates reaching as high as 10%. Hence if the market falls 10% or even 15% what should an investor do?.

The key to remember is that the best time to buy stocks is when there blood on the streets. Just because Trump, a Republican, gets elected does not mean that the US will turn into a banana republic overnight. In fact, the chances of that happening are next to zero. So regardless of who wins the election, smart investors can take advantage of cheaper equity prices if other investors panic and dump stocks.

Generally US stocks have performed well in the years following a big one day decline. According to an article by Andrew Oxlade of Schroders, the S&P 500’s biggest declines have been followed by annual returns that average 14.9% over five years, From the article:

The US stockmarket has delivered average annual returns of 14.9% in the five years following its worst days of the past quarter century, according to analysis by Schroders.

The data underlines the historic resilience of shares over longer timeframes, even following major shocks.

The biggest rebound was a return of 164%, or an annualised 21%, in the five years after a crash on 20 November 2008, when the S&P 500 fell by 6.7%.

That date fell during a particularly gloomy phase of the 2008-09 financial crisis. Shares in struggling Citigroup fell by 26% on the day, shortly before a rescue deal was announced for the bank.

Given the abject mood of the time investors may have struggled to accept that an investment of $10,000 in the market made at the start of that turbulent day would have grown to $26,400 within five years, before charges.

Click to enlarge

sp500-ten-worst-one-day-falls-and-returns-in-following-years

Source: How the US stockmarket performs after heavy one day falls, Schroders

Similar to the US, the UK equity market also performed well following major one day declines. The strongest recovery for the FTSE All-Share was after during the Global Financial Crisis and when the British banking sector was hit hard on on March 2, 2009. The index soared by 126% in the following five years.

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • iShares MSCI United Kingdom ETF (EWU)

Disclosure: No Positions