The Best and Worst Foreign Bank Stocks YTD

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The five best performing foreign bank ADRs Year-To-Date (YTD) as of February 11th are:

1. Banco of Chile(BCH)
YTD Change: 11.93%

2. Mizuho Financial (MFG)
YTD Change: 8.99%

3. Royal Bank of Scotland(RBS)
YTD Change: 8.20%

4. Mitsubishi UFJ Financial (MTU)
YTD Change: 3.66%

5. Corpbanca (BCA)
YTD Change: 0.59%

The five worst performing foreign bank ADRs Year-To-Date (YTD) as of February 11th are:

1. Banco Macro (BMA)
YTD Change: -14.42%

2. UBS (UBS)
YTD Change: -17.86%

3. Banco Santander S.A (STD)
YTD Change: -18.25%

4. Banco Bilbao Vizcaya Argentaria (BBVA)
YTD Change: -23.61%

5. National Bank of Greece (NBG)
YTD Change: -23.80%

Banco of Chile(BCH) is the best performer with a return of about 12%. National Bank of Greece (NBG) is the worst performing foreign bank ADR with a loss of about 24%. This is not surprising since Greece is suffering from its huge debt and investors are betting against Greek equities. Today EU leaders announced that they would help Greece but have not mentioned any specific aid package. The big fat Greek debt saga may continue for a while and accordingly Greek equities would remain highly volatile. Spain is one of the high deficit countries in Europe together with Portugal, Ireland and Greece (“PIGS”). Hence Banco Bilbao Vizcaya Argentaria(BBVA) and Banco Santander (STD) of Spain are also down significantly so far this year.

Review: Brazil’s Bovespa Index

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The Brazilian equity and futures exchange in Sao Paulo is the 4th largest in the Americas and 13th largest in the world based on market capitalization. The main index of the Brazilian stock market is the Bovespa index.

From Wikipedia:

“The Bovespa Index (Portuguese: Índice Bovespa) is an index of about 50 stocks that are traded on the São Paulo Stock, Mercantile & Futures Exchange (Bovespa: BOlsa de Valores do Estado de São PAulo).

The index is composed by a theoretical portfolio with the stocks that accounted for 80% of the volume traded in the last 12 months and that were traded at least on 80% of the trading days. It’s revised quarterly, in order to keep its representativeness of the volume traded and in average the components of Ibovespa represent 70% of the all the stock value traded.”

The components of the Bovespa index are listed here. About half of the index components traded in the U.S. markets as ADRs in the organized exchanges except Banco Do Brasil. These components are listed below together with their current dividend yields:

1.AmBev (ABV)
Current Dividend Yield: 1.18%

2.Banco do Brasil(OTC: BDORY)
Current Dividend Yield: N/A

3.Banco Bradesco(BBD)
Current Dividend Yield: 2.15%

4.Brasil Telecom (BTM)
Current Dividend Yield: N/A

5.Braskem (BAK)
Current Dividend Yield: N/A

6.BRF Brasil Foods (BRFS)
Current Dividend Yield: N/A

7. Cemig (CIG)
Current Dividend Yield: 2.45%

8.Companhia Siderurgica Nacional (SID)
Current Dividend Yield: N/A

9.CPFL Energia (CPL)
Current Dividend Yield: 6.82%

10.Embraer (ERJ)
Current Dividend Yield: N/A

11.Fibria Cellulose (FBR)
Current Dividend Yield: N/A

12.Gafisa (GFA)
Current Dividend Yield: N/A

13.Gerdau (GGB)
Current Dividend Yield: N/A

14.Gol Transportes Aereos (GOL)
Current Dividend Yield: N/A

15.Itau Unibanco(ITUB)
Current Dividend Yield: 0.44%

16. Net (NETC)
Current Dividend Yield: N/A

17. Petrobras(PBR)
Current Dividend Yield: 0.99%

18.TAM Airlines (TAM)
Current Dividend Yield: N/A

19.Ultrapar (UGP)
Current Dividend Yield: 2.16%

20. TIM Participaoes (TSU)
Current Dividend Yield: 2.18%

21. Companhia Vale do Rio Doce (VALE)
Current Dividend Yield: 1.90%

22. Vivo (VIV)
Current Dividend Yield: N/A

47 High-Yield Picks With Yields More Than 10%

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I ran the stock screener for high dividend/yield stocks, trusts and funds with yields greater than 10% and trading in the New York Stock Exchange. This resulted in the following list. Investors looking for high yields can use this list as a starting point for further research.

Stocks and Funds Yielding > 10%:

[TABLE=395]

Magyar Telekom Plc. of Hungary(MTA) and Telecom Corp of New Zealand(NZTCY) offer excellent dividends. Iowa Telecommunications Services (IWA) offers telecom services to customers in rural Iowa, Minnesota and Missouri.

BP Prudhoe Bay Royalty Trust (BPT) is a oil royalty trust operated by BP Alaska in the North Slope oil fields of Alaska. ING International High Dividend Equity Income Fund(IID) is closed-end fund which invests mainly in foreign stocks and derivatives linked to stocks.

Drug Stocks Offer Long-Term Investment Opportunities

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In  a recent article I wrote that U.S. public healthcare spending is projected to exceed private spending by 2012. U.S. healthcare expenditures was estimated to reach about 17.3% of the GDP in 2009. One of the beneficiaries of all this spending are the companies in the healthcare industry such drug makers, health insurers, etc. They all may perform well in the coming years.

The table below lists the major drug stocks trading on the NYSE:

[TABLE=394]

AstraZeneca plc, GlaxoSmithKline plc, Novartis AG and Tongjitang Chinese Medicines Co. are the four foreign drug companies in the list. U.K-based AstraZeneca (AZN) is the owner of many top selling drugs including the “purple pill” Nexium which is used for the treatment of Gastroesophageal reflux disease (GERD). Currently AZN offers a 7.75% dividend yield. GlaxoSmithKline (GSK) is another British giant whose products are sold in over 150 countries. GSK pays a 6.02% dividend. Switzerland-based Novartis(NVS) had sales of over $45B last year.Tongjitang Chinese Medicines Co (TCM) is a specialty drug company that is engaged in the manufacture of modernized traditional Chinese medicine.

Among the U.S. companies, Johnson and Johnson(JNJ) is by far the largest maker of a wide range of healthcare products. JNJ was founded in 1886. The stock is a high quality long-term consistent performer. Form JNJ’s investor site:

“Our consistent performance has enabled us to deliver an exceptional track record of growth that few, if any, companies can claim: 76 consecutive years of sales increases; 25 consecutive years of adjusted earnings increases; and 47 consecutive years of dividend increases. Over the last 10 years, Johnson & Johnson stock generated a 5.6 percent total return for investors compared to a -1.4 percent total return for the S&P 500.”

A Review of Retirement Age in OECD Countries

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Tomorrow civil service workers in Greece plan to go on strike protesting the government’s pension reforms. A recent article in the NY times discussed the current situation in Greece.

From a BBC article titled Greece plans to ban early retirement:

“Greece’s government intends to raise the national pension age and ban early retirement as it tries to tackle its huge budget deficit.

The socialist government said it wanted to increase the average retirement age from 61 to 63 by 2015.

The steps would be part of a series of austerity measures aimed at curbing the country’s deficit and national debt.

But the moves have angered many of the unions, which have scheduled strikes in protest.”

According to OECD data, the average legal retirement age in OECD countries is 64. However in Greece it is as low as just 58. This is another reason why Greece is in turmoil now and the government is raising the retirement age. Millions of Greek workers retire early and receive fat pensions.In some countries like Norway and Iceland the retirement age can be as high as 67. Recently Spain inceased the retirement age from 65 to 67.

The  graph below shows the “labour force exit age – i.e., the actual average age when people stop working – is often higher or lower than the official retirement age” in  OECD countries:

Click to enlarge

OECD-Retirement-Age-Comparison

In Austria the average man exists the workforce at age 59 a full 6 years ahead of official retirement age.