3 ETFs Offer Exposure To International Utilities

Posted by on

The 3 ETFs that investors can use to invest in foreign utilities are iShares S&P Global Utilities Sector Index Fund (JXI) , WisdomTree International Utilities Fund(DBU) and SPDR S&P International Utilities Sector Fund (IPU).

Among these ETFs, iShares’ JXI is the largest fund with an asset base of $165M. The distribution yield is 5.62%. In addition to foreign utilities, JXI invests in US utilities also such as Exelon (EXC) and Southern Company (SO). As of 10/31/2009 this year, the fund has a negative return of 2.19%. Last year it was down 29.15%. However the fund is an easy way to gain exposure to many foreign utilities like Iberdrola (Spain), Centrica(UK) and E.ON(Germany).

Comparison of 3 ETFs for Global Utilities:

[TABLE=248]

2-Year Performance Comparison:

2-year-perf-chart.png

Among its top 10 holdings, WisdomTree International Utilities Sector Fund has some excellent utility stocks including Fortum Oyj of Finland and Electricite de France of France. The SPDR S&P International Utilities Sector Fund (IPU) has a very low asset base of just $4M.

The 30 Best Brands of Japan

Posted by on

Japan’s Best Global Brands for 2009 are shown in the chart below:

Top-30-Japan-Brands

Source: Interbrand

The above list, created by the leading brand consultancy Interbrand, is the first ranking of global brands that originated in Japan. Automobile and electronics brands dominate the Top 30 list showing the importance of these two sectors to Japan. Most of these brands are popular worldwide.

Some of the companies listed in the US include the owner of Toyota and Lexus brands – Toyota Motor (TM), Sony(SNE), Nissan Motor (OTC: NSANY), Hitachi (HIT), Honda Motor (HMC), etc. The complete list of Japanese ADRs trading in the organized US exchanges can be found here.

Why Should You Own Dividend Paying Stocks?

Posted by on

In the 1950s investors used to own stocks mainly for their dividends.They looked for companies that paid consistent dividends out of profits. If the stock appreciated in price that was an added incentive. However all that changed in the recent years when many investors started investing purely for price appreciation. This strategy failed miserably when many of the tech stocks got crushed in the dot-com crash and some non-dividend payers disappeared.

Even in a rising market investing in dividend stocks is still important for a diversified portfolio. Historically utilities and financials have been investors’ favorites for dividends. But since the credit crisis began most of the financial stocks have substantially cut or suspended dividend payments. However there are still many high quality dividend paying stocks in utilities, consumer staples, health-care that offer excellent long-term opportunities.

The following are some good reasons to own dividend stocks stated in a recent Wall Street Journal article titled Dividend Payers Return to the Fore:

  • As of Nov 20th this year, non-dividend stocks have gone up 55% while dividend payers have increased only 21.3%
  • Valuations of dividend paying stocks look reasonable relative to the rest of the market now
  • If stocks go down again then dividend stocks will hold better. This is especially important since there are many issues the can affect stock markets adversely such the Dubai crisis, high unemployment rates, commercial real estate market bubble, etc.

Chart – Dividend Vs. Non-Dividend Paying Stocks:

Dividend-Non-Dividend-Stocks

  • Dividend stocks have outperformed non-dividend stocks in bear markets. For example in during 1981-82, 1990 and 2000-02 market crashes they performed better than non-payers
  • Last year dividend stocks fell 39% compared to 45% for non payers
  • Companies that increased or started paying dividends have returned 9.5% yearly on average since 1972
  • Dividend stocks in the consumer staples, tobacco and health care sector hold lots of potential growth for the future

Some of the stocks recommended in the article include:

Consumer Staples:
Coca Cola (KO)
Current Dividend Yield: 2.87%
Raised annual dividends for the past 25 years

Tobacco:
Altria Group Inc (MO)
Current Dividend Yield: 7.16%
Raised Dividends this year

Lorillard Inc (LO)
Current Dividend Yield: 5.07%
Raised Dividends this year

Reynolds American Inc (RAI)
Current Dividend Yield: 7.01%
Raised Dividends this year

Health-Care:
Abbott Laboratories (ABL)
Current Dividend Yield: 2.96%

Covidien Ltd (COV)
Current Dividend Yield: 1.41%

Teva Pharmaceutical Industries Ltd (TEVA)
Current Dividend Yield: 1.19%

A few other top US dividend stocks:

Dividend Stocks

Note: Friday’s close represents Friday, Nov 20th

Some top dividend paying foreign stocks are listed below:

1. Royal Bank of Canada (RY)
Current Dividend Yield: 3.59%

2.E.ON AG (OTC: EONGY)
Current Dividend Yield: 5.00%

3. National Grid Plc (NGG)
Current Dividend Yield: 4.20%

4.CPFL Energia S.A. (CPL)
Current Dividend Yield: 6.84%

5.Eni Spa (E)
Current Dividend Yield: 5.86%

Which Foreign Banks Have Large Exposures to Dubai World?

Posted by on

According to WSJ, European Banks’ UAE Exposure Totals $83.7 Billion.

The breakdown is as follows:

UK banks = $49.5B
French banks = $11.3B
German banks = $10.2B
Dutch banks = $4.7B
Swiss banks = $4.3B
Italian and Belgian banks = $3.2B

The British banks that have large exposure to Dubai World are:  HSBC Holdings (HBC), Royal Bank of Scotland (RBS), Barclays (BCS), Llyods Banking Group (LYG) and Standard Chartered. RBS has about $1B exposure and Barclays loaned about $200M.

From the Web:

The Japanese banks that lent funds to DW include Mitsubishi UFJ Financial (MTU), Sumitomo Mitsui and Mizuho. Mizuho is owed about $100M.

Taiwanese banks’  exposure to Dubai World amounts to $196M.