Ten German Blue Chips

The DAX index of Germany is comprised of the 30 largest German publicly listed blue-chip companies with the highest revenues. One of the ETFs that tracks this index is ETFlab DAX. The top 10 holdings in this fund are listed below together with their ADR ticker and dividend yield:

1. Siemens(SI)
Current Dividend Yield: 2.52%

2. Bayer AG(OTC: BAYRY)
Current Dividend Yield: 2.47%

3. Allianz (AZSEY)

4. BASF SE(OTC: BASFY)
Current Dividend Yield: 4.34%

5. Daimler (DAI)
Current Dividend Yield: 1.50%

6. Detsche Bank AG(DB)
Current Dividend Yield: 0.99%

7. Deutsche Telekom(DT)
Current Dividend Yield: 7.19%

8. SAP AG(SAP)
Current Dividend Yield: 1.39%

9. RWE AG(OTC: RWEOY)
Current Dividend Yield: 5.96%

10. E.ON AG(OTC: EONGY)
Current Dividend Yield: 4.99%

EON and RWE are two of the large utilities in Germany offering excellent dividend yields.

Top 10 Bank Lenders to the Agriculture Sector

Lending to consumers and businesses is not projected to be robust for the foreseeable future. However banks may see growth in farm lending as this sector has remained strong in recent years. Farm lending profits have helped some banks offset some of the losses from the residential and commercial real estate exposures.

The Top 10 Banks in Farm Lending by dollar volume as of 3rd quarter,2009 are listed below:

1.Wells Fargo Bank (WFC)
2. Bank of America (BAC)
3. Bank of the West
4. Rabobank
5. U.S. Bank (USB)
6. First National Bank (FNSC)
7. M&I Marshall and Ilsley Bank
8. Regions Bank (RF)
9. Citibank (C)
10. Pinnacle Bank

Source: FDIC

Bank of the West and Rabobank are California-based banks. Wells Fargo is the largest farm lender.In addition to Wells Fargo, the other major players in this area are U.S. Bank, Bank of America and Citibank.

The Complete List of Foreign Bank Stocks

The complete list of foreign bank stocks trading in the organized U.S. exchanges are listed below:

a) Foreign Banks

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b) Canadian Banks

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In terms of performance, British bank Royal Bank of Scotland(RBS) is up 29% YTD. Barclays(BCS) and Llyods Bank(LYG) are up about 15% YTD. It must be noted that RBS fell heavily during the global credit crisis and had a 2: 1 reverse stock split. Itau Unibanco(ITUB), National Bank of Greece(NBG), Banco Santander Brasil(BSBR), Grupo Financiero Galicia(CGAL) and Banco Bradesco(BBD) are all down over 5% YTD.

Brazilian banks Itau Unibanco,Banco Santander Brasil and Banco Bradesco are the three most heavily traded foreign bank ADRs so far this year. The list of foreign banks trading in the OTC markets can be found here.

Will Bank Stocks Rally Again This Year?

Financial stocks have rallied 140% since last March’s lows. Many investors are wondering if financials will continue their run this year given the jobless economic recovery currently underway.

An article titled “Do you dare buy banks?” in the latest edition of Bloomberg BusinessWeek mentions that financials in the S&P 500 are expected to rally 16% this year based on some analyst forecasts.

From the article:

No U.S. industry has faster profit growth than banks and brokers, and no group is more bad-mouthed by investors. It may be time for them to get over their distaste, says Mark Giambrone, a fund manager for San Antonio-based USAA Investment Management, which oversees about $74 billion. “The stocks are clearly too cheap,” says Giambrone, whose USAA Value Fund (UVALX) owns Wells Fargo (WFC), PNC Financial Services (PNC), and Bank of America (BAC), among other financial stocks. “There may be some bumps in the road ahead, but for the most part those are reflected in valuations.” The Standard & Poor’s 500 Financials Index (S5FINL) of 78 banks, brokerages, and insurance companies is down 60% since peaking in February 2007, more than twice the drop of the S&P 500-stock index.

Many of Giambrone’s peers remain unconvinced that all the pain has been taken in financial stocks. A survey by Bank of America found financial shares the least favored stocks among 123 money managers. But earnings at financial companies rose an estimated 120% in the fourth quarter, accounting for all the income increase in the S&P 500, data compiled by Bloomberg show. Those financial company earnings should triple by 2011, climbing four times as fast as the market, analysts figure. Should those estimates prove correct, financial shares are trading at about a 15% discount to the S&P 500.”

Banks are still not out of the woods yet. After last year’s 140 banks failures, so far four banks have failed this year. In addition to the slowdown in foreclosure activity in the housing market, there are some signs that credit card charge-off rates are declining. A Reuters report yesterday said:

“U.S. credit card data for December showed some signs that fewer consumers were falling seriously behind in their payments.

Four out of six companies reporting credit card activity for December said charge-offs declined in the month.

Delinquency rates, which portend future credit card defaults, declined at all of the companies except JPMorgan Chase & Co (JPM.N), according to regulatory filings on Friday.”

In the tables below I have listed banks paying more than 3% dividends:

1) Bank Stocks Trading in the NYSE

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2) Bank Stocks Trading in the NASDAQ

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Investors have to be very selective in  picking up bank stocks as there are still many unknown headwinds that banks face this year. To quote former Secretary of Defense Donald Rumsfield:

“As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don’t know
We don’t know.”

While some of the banks above high yields because their share prices have fallen, there are some banks that are stable and are worth looking into. A few of these banks are Bank of Hawaii(BOH), Cullen/Frost Bankers Inc(CFR), etc.

Nine Natural Gas Stocks Yielding More Than 6% Dividends

Natural gas prices in the U.S. rose this month due to the December cold snap which affected many states and the higher-than-anticipated storage withdrawals in December. Other reasons that have been attributed to the price increase include declines in gas production and higher oil prices. After hitting a seven year low last September prices have been trending up. Extremely cold winter season this year may keep prices high as the demand picks up.

The following nine stocks in the natural gas sector yield dividends in excess of 6%:

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Some of the companies listed above are integrated firms with operations in gathering, compressing, treating, and transporting natural gas and other energy products. For example, Kinder Garden Energy Partners (KMP) owns and operates pipelines and storage facilities for crude oil, refined petroleum products and natural gas in the U.S. and Canada.