Five Australian Stocks Yielding Over 5% Dividends

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Often called as “the Lucky Country”  Australia is blessed with plenty of natural resources and wonderful weather. Similar to the Canadian banking system, the Australian banking system is stable and was least affected during the financial crisis.Australia has many of the commodities such as coal that the growing economies of China and India desperately need.

Australian equities have been one of the best performing in the world over the last 110 years. From 1900 to 2009, Australian stocks have  yielded a real return of 7.5% per year according to the Credit Suisse Global Investment Yearbook 2010.

In this post lets take a quick look at five Australian stocks that have current dividend yields of over 5%. All these stocks trade on the OTC market.

1. Metcash Ltd (OTC:MHTLY) is engaged in marketing and wholesale distribution of grocery, liquor, hardware and other fast moving consumer products in Australia and parts of New Zealand. Some of the brands owned by Metcash include IGA, Cellarbrations, Foodlink, Bottle-O and Bottle-O Neighbourhood. Currently the stock pays a 6.06% dividend yield.

2. Telstra Corp Ltd (OTC:TLSYY) is Australia’s leading telecom company offering both fixed and mobile services. Telstra also owns 50% of FOXTEL which provides cable tv services. Telstra has one of the largest shareholder base in Australia. During 2009-10, it generated A$6.2 billion of free cash flow and paid A$3.5 billion in dividends to shareholders. The current dividend yield of the ADR is 10.16%.

3. Sydney-based QBE Insurance Group Ltd (OTC:QBEIY) is one of the top 25 insurers and reinsurers worldwide and operates in 49 countries. The company’s gross written premium in 2009 was $14.5 billion.  The stock pays a 7.05% yield.

4. Amcor Limited (OTC: AMCRY) is engaged in the business of packaging solutions supplying a range of plastic (rigid & flexible), fibre, metal and glass packaging products. Amcor operates in 43 countries. Annual sales totaled A$12.2 billion last year. The current dividend yield is 5.15%.

5. National Australia Bank Ltd (OTC: NABZY) serves about 11 million customers thru 1800 branches in Australia, New Zealand, U.S. and the UK. The bank operates in the UK under the Clydesdale Bank and Yorkshire Bank brands. In the U.S. the bank owns the Great Western Bank. Yesterday the bank announced “a fiscal-year profit of 4.22 billion Australian dollars ($4.16 billion), up 63.2% from the year-ago period.” The current yield of the ADR is 5.31%.

TARP Profits to the U.S. Treasury

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In a post last month, I discussed about the success of the Troubled Asset Recovery Program (TARP) to the U.S. By July of this year, the US government had received $22.7 billion in interest, dividends, sale of warrants, stocks and other income.

The graphic below shows that the TARP has been profitable to the U.S. Treasury and the top 1o firms that have paid the most money:

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tarp-profits-to-us.jpg

Source: Bloomberg BusinessWeek

Bank of America(BAC), Wells Fargo(WFC), JPMorgan Chase(JPM), Goldman Sachs(GS), Morgan Stanley(MS), Hartford Financial(HIG), PNC Financial Services(PNC) have all fully repaid their TARP loans.

USA vs. UK: Government Finances and Size of Economy

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The graphic below shows a comparison of the government finances and the size of the economies of the US and UK:

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USA-UK-government-finances-comparison

Source: The New York Times

While the UK has higher government revenues as a percentage of GDP than the US, in terms of debt and spending the UK and the US do not have much difference. It must be noted that the UK was the worst affected country in the financial crisis after the US.

Related:

China vs. USA – A Comparison of Government Finances and the Economy

China vs. India: Economy and Government Finances 

The Soundest Banks of the World

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The 25 Soundest Banks of the World based the highest capital-asset ratios (CAR) in 2009 are listed below:

Soundest-Banks-Global

Source: The Banker

Smaller banks dominate this list from both the developed and emerging countries. 18 of the 25 banks shown above are from emerging markets underlining the conservative business practices of banks in emerging markets. Electro Banque of France topped the list with a CAR of 87.7% compared to just 6% to 7% of the world’s biggest banks. San Mateo,California-based investment manager Franklin Resources Inc. (BEN) takes the top 3rd spot with a CAR of 54.60%.

Top 25 Chinese Banks based on Tier 1 Capital

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The Top 25 Chinese Banks based on Tier 1 Capital in 2009 are listed below. This ranking is part of the annual World’s Top 1000 Banks published by the influential The Banker magazine based in London,UK.

Top-25-China-Banks

Source: The Banker

Note: The Tier 1 Capital is in $ millions.

The top bank in China is Industrial Commercial Bank of China (ICBC) which also ranked as the 7th best bank in the global ranking. The four new entrants in the list above are Ping An Bank, Guangzhou Rural Commercial Bank, Evergrowing Bank and Bank of Hangzhou. Some of the banks that trade on the OTC markets in the U.S. are Bank of China (BACHY),China Construction Bank Corporation (CICHY), China Merchants Bank (CIHKY) and Industrial and Commercial Bank of China (IDCBY).