28 US Dividend Stocks from the DJ STOXX Global Select Dividend 100 Index

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The Dow Jones STOXX® Global Select Dividend 100 Index tracks the performance of the 100 highest-yielding dividend companies in North America, Asia/Pacific and Europe. Of the 40 stocks from North America, 28 are from the U.S. and the rest are from Canada. Some of the Canadian components in this index include Enbridge (ENB), Bank of Montreal (BMO), Trans-Canada Corp (TRP), National Bank of Canada (NA.TO), etc. In this post, lets take a quick look at the US companies represented in this index.

The 28 US stocks in the  DJ STOXX Global Select Dividend 100 Index and their Current Dividend Yields are shown below:

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Altria (MO), CenturyTel (CTL) and New York Community Bancorp (NYB) offer over 7% dividends now. Altria is a favorite stock among many US dividend investors. It expects to maintain a dividend payout ratio of about  75% of net earnings. A $10,000 investment in the stock on January 2, 1970 would have grown to $516,533.33 for a return of 22,216.14% based on the closing price yesterday. The original 277.78 shares would have increased to 26,666.67 split adjusted. (Source: Investment Value Calculator at Altria’s  IR site).

New York Community Bancorp Inc (NYB) is offering 60 Million shares of common stock at $13.00 per share to fund the acquisition of the failed Cleveland,Ohio-based AmTrust Bank. PNC (PNC) and Regions Financial (RF) in the list are not great dividend payers now. Utilities such as Duke Energy (DUK), Consolidated Edison (ED) offer yields above 5%.

The Most Promising 60 Chinese Companies

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Hong Kong-based The Asset magazine recently published a list of the most promising Chinese companies. According to their study, these companies have the potential to rise from national/regional leaders into global champions.

The list was compiled from among the 300 companies that are mainly listed in the Hong Kong Stock Exchange based on a survey conducted with investment professionals and research analysts.Later they were ranked in each category based on the following factors:

“(a) earnings/profitability; (b) quality of management; (c) standards of corporate governance; (d) treatment of minority shareholders; and (e) effectiveness of investor relations. ”

China’s Most Promising Companies 2009:

China-Top-Companies-2009

Source: The Asset

With the Shanghai Composite Index up 83% as of Dec 7 this year, global investors are on the hunt for the best Chinese stocks. The above list offers a good starting point. Some of the companies in the list are becoming high profile global players by acquiring companies in many part of the world. Companies in the above winners list trading as ADRs in the US include Bank of China (OTC: BACHY), China Life Insurance (LFC),  China Mobile (CHL) and Yingli Green Energy Holding Co. Ltd. (YGE). Other Chinese ADRs can be found here.

List of Country-Specific ETFs and CEFs

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Some investors find it easy to invest in a country-focused fund rather than research and pick individual companies. This strategy works well since most of these funds hold the largest companies in a specific country and investing in them is relatively safer than say putting money in lesser known companies.

Many country-specific funds are available in the form of Exchange Traded Funds (ETFs) and Closed-Ended Funds (CEFs). Each have their own advantages and disadvantages. CEFs can be highly volatile during adverse market conditions. For example, to invest in Chile one can choose either the Chile ETF from iShares (ECH) or the Closed-Ended Fund, The Chile Fund (CH). ECH has $240M in assets while CH has $173M but the dividend yield for CH is 8.16%.

The table below lists the tickers of  Exchange Traded Funds (ETFs) and Closed-Ended Funds (CEFs) by country:

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Please note that this list may not be complete as new ETFs are launched by providers. The data shown in the table is known to be accurate but do your own research before making any investment decisions.

USA Ranks 114th in the Happy Planet Index

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The GDP is the most commonly used standard to measure the growth and development of countries. It has many flaws such as the exclusion of variables like the quality of life. Another factor that is also widely recognized is the Human Development Index (HDI). It measures the average of income measured by GDP, health measured by life expectancy and education measured by literacy/enrollment. Similar to GDP, the HDI is also not a complete representation of all aspects of growth and development of any economy since it ignores variables such as the quality of life, the relationship between current income and growth, etc.

The London-based independent think-and-do tank New Economics Foundation(NEF)  developed a new measure called the Happy Planet Index (HPI) back in 2006. It measures “the ecological efficiency with which human well-being is created around the world. The HPI reflects the average years of happy life produced by a given society, nation or group of nations, per unit of planetary resources consumed. Put another way, it represents the efficiency with which countries convert the earth’s finite resources into well-being experienced by their citizens. The Global HPI incorporates three separate indicators: ecological footprint, life-satisfaction and life expectancy.”

HPI = (Life Expectancy x Life Satisfaction)/Ecological Footprint

where Life Satisfaction is calculated based on surveys and others are hard variables.

According to this index, Costa Rica is the happiest country in the world. The USA stands at 114 just one step above Nigeria and one rank below Madagascar.

The 2009 Happy Planet Index Rankings are shown in the graphic below:

Click to Enlarge

Happy-Planet-Index-Rankings-2009

Rich countries fall in the middle of the rankings. The Netherlands is the highest ranked among Western countries and comes in at 43. Similar to Costa Rica, many of the countries that top the list are small islands including Jamaica, Dominican Republic, etc.

A few important take-aways from the THE ^UN HAPPY PLANET INDEX 2.0 report are:

  • No country successfully achieves the three goals of high life satisfaction, high life expectancy and one-planet living.
  • Whilst most of the countries studied have increased their HPI scores marginally between 1990 and 2005, the three largest countries in the world (China, India and the USA) have all seen their HPI scores drop in that time.
  • It is possible to live long, happy lives with a much smaller ecological footprint than found in the highest-consuming nations.
  • More dramatic is the difference between Costa Rica and the USA. Costa Ricans also live slightly longer than Americans, and report much higher levels of life satisfaction, and yet have a footprint which is less than a quarter the size

In the executive summary the authors of the report write “In 2008, Americans voted for ‘change’ and ‘hope’ above else.” With one year in office, is our President Obama fulfilling their expectations?