The Best Banks of the World 2008

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One of the worst performing sector in the current bear market is the financial sector. Many bank stocks are down over 50% or more. The financials in the S&P 500 Index is down 56.3% year-to-date. On the international level, many well known banks have had to raise capital to stay in business.Others have been gobbled up by their competitors.

In this scenario, The Banker magazine presented its Ninth Bank of the Year Awards for 2008.

While now is not the best time to jump into some of these beaten-down financials, it is prudent to watch this sector and monitor developments.

The Banker Magazine selected The Best Banks of the world 2008 based on many criteria including:

  • Questionnaires Submitted by 740 banks from 150 countries
  • Latest Earnings Results
  • Growth Rates
  • Performance data over the period contained in the Questionnaire
  • Other factors like Technology, Acquisitions and Key Strategic Developments

As per the magazine, these winners “are the cream of the global banking community
and the highest achievers in the industry.”

In this post I have listed the Winners at the global level. The table below includes tickers if the bank is traded in the USA.

The Best Banks of the World 2008

[TABLE=127]

Overview:
1.BNP Paribas of France won both the Global Bank of the Year and the award for best bank in Western Europe. BNP Paribas trades on the OTC market with ticker
BNPQY.

BNP Paribas was the 3rd largest in the world and the largest in Eurozone based on assets held as of April 30 this year.(Source: The Banker) BNP is a member of France’s main stock market Index the CAC 40.BNPQy has a yield of 10.04%.

2.Spain-based Banco Santander (STD) won the award for Latin America because the bank has a huge presence in Latin American countries.Santander was part of the consortium that acquired ABN Amro of The Netherlands last year.In October, Santander acquired the remaining 75.65% of Sovereign Bancorp in USA it did not already own. The current dividend yield is 8.50%.

3.Citibank(C) was rescued by the U.S. government by pumping billions of dollars last month after the bank was on the verge of collapse.After reaching an all-time low of $3.05, Citi’s stock has rebounded to close $7.71 yesterday. According to the deal agreed with the government, Citi cannot pay more than $0.01 in quarterly dividends for the next 3 years
without prior approval.

4.New York-based Bank of New York Mellon(BK),was formed after the merger of The Bank of New York Company, Inc. and Mellon Financial Corporation of Pittsburgh.In the last 52 weeks, the stock is down 39%. BK pays a dividend of 3.19%.

5.The Brazilian bank Banco Bradesco(BBD) won the award in the Environmental, Social and Governance category. Bradesco is one of the large private-sector banks in
Brazil.BBD is a component of the Bovespa Index. Similar to its peer Banco Itau (ITU), BBD is down about 57% in the last 52 weeks.

Top Ten Global Personal Care Products Makers

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Personal Care Products include items that we use on a daily basis. Some of the items in this group are hair care products, deodorants, detergents, toothpaste, skin care products, band-aids, baby diapers, tissue, etc. Some of these products are necessities and consumers buy them even when the economy is down. This is one reason why stocks in this sector are good picks to ride out a recession.

In order to identify the Top 10 Companies in the Personal Care Products business I used Computerwire’s DataMonitor list. The following top ranking companies were selected based on their 2007 personal care product revenues:

[TABLE=126]

Note: Companies whose stocks are not traded in the USA are marked with N/A.

Brief Overview:

1. The Procter & Gamble Company (PG) is a Cincinnati,Ohio USA based Fortune 500 company that manufactures a wide range of consumer products and markets them in over 180 countries. P&G owns many of the world-class brands like Gillette, Olay, Pampers, Bounty, Duracell, Vicks, Folgers Coffee, Crest etc. PG has an yield of 2.6% and a P/E of 16.4. Total Revenue in 2007 was $85.0B. In the last 5 year, annual EPS growth was 14.5%.

2.Unilever PLC (UL) is one of the parent companies of the Unilever Group. Another company is Unilever N.V. (UN) based in Holland. Some of Unilever’s brands include Brooke Bond Tea, Ponds, Ben & Jerry’s, Slim Fast, Bertolli, Ragu, Lipton,Close-up, Dove, Thermasilk, etc. UL pays a dividend of 3.01% and the P/E is 10.98%.

3. Johnson & Johnson (JNJ) is a great American company with a wide range of products in its portfolio. JNJ is also a Dow Jones Industrial Average component. Some of JNJ’s brands are Acuvue, Band-Aid, Nicorette, Tylenol, Neutrogena, Shower to Shower, etc. S&P has a 5-star rating on JNJ. In the past 52 weeks JNJ is down just 16%. Annual dividend growth rate is 15%. In 2007, total revenues were $64.5 B.

4. Another global health and hygiene products maker is Irving, Texas-based Kimberly Clark Corp (KMB). The company makes many paper-based products including Kleenex, Cottenelle, Huggies, etc.

Total Revenues in 2007 was $19.6B. The P/E is 13.89 and the yield is 4.06%.

5. Colgate-Palmolive Company (CL) is a USA-based multi-national company that is famous for the Colgate tooth paste brand worldwide. Colgate owns brands like Ajax, Colgate toothpaste, Fresh Start, Palmolive soap, etc. Similar to JNJ, CL is also a 5-star rated stock by S&P. The current yield is 2.55% and the P/E is 17.93. Annual EPS growth rate in the past 5 years is 8%.

6.New York City, USA-based Estee Lauder (EL) is a manufacturer and marketer of skin care, fragrance and hair care products. Owned brands include Estee Lauder, Aramis, Clinique, American Beauty, Donna Karan,etc. EL has a dividend yield of 2.03%.

7. Incorporated in United Kingdom, GlaxoSmithKline Plc (GSK) is the world’s second largest drug company but also manufactures oral hygienic products, nutritional drinks, etc.GSK is a multi-national corporation with its products being sold in over 140 countries. GSK is a component of the FTSE 100 Index. Some GSK’s brands are Tagamet, Flonase, Aquafresh, etc.

The other companies in the above list Svenska Cellulosa Aktiebolaget, Kao Corporation and L’Oreal S.A. do not trade in the organized exchanges in the USA.

Five Most Traded Asian ADRs

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The following are the five most traded ADR stocks from Asia based on Daily Trading Volume:

1.Company Name: Taiwan Semiconductor Manufacturing
Ticker: TSM
Country: Taiwan

2.Company Name: United Microelectronics
Ticker: UMC
Country: Taiwan

3.Company Name: BHP Billiton
Ticker: BHP
Country: Australia

4.Company Name: Focus Media
Ticker: FMCN
Country: China

5.Company Name: Baidu.com
Ticker: BIDU
Country: China

Top Healthcare Stocks for Bear Markets

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The Dow Jones Global Titans 50 Index contains 50 of the largest companies by market capitalization and well known blue chip companies in the world. The seven healthcare components in this index are listed below:

Abbott Laboratories (ABT)

GlaxoSmithKline PLC (GSK)

Johnson & Johnson (JNJ)

Merck & Co. In (MRK)

Novartis AG (NVS)

Pfizer Inc. (PFE)

Roche Holding AG  (RHHBY)

An investor interested in gaining exposure to the healthcare sector can research these companies. Since they are some of the largest in this sector they may have lower risk profiles than other healthcare companies.

Foreign Utilities List with Current Yields

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During bear markets utility stocks used to be provide shelter for investors since they were considered to be stable, slow-growth and conservative investments. However that has changed in the past few years. These days they do not seem to offer the much-desired stability and protection that they were once known for. This is evident in the current market as well.

Year-to-date the S&P 500 is down 38.96% and the Utilities sub-sector within the index is down 29.82%. Though this is less than the S&P 500, the sector is still down around 30% for the year – which is very high for this sector. On the other hand, the best performing sector consumer-stables is down only 17.02%. On the global level, the SPDR SP International Utilities Sector ETF (IPU), started in July of this year, has a negative return of 29.09% year-to-date.

Overall though utilities have lost their former glory, they must still be an integral part of a well-diversified portfolio. Usually utilities have high yields and are long-term value plays. Some of the foreign utilities have attractive yields and are worth looking into at current levels. The following table lists all these utility stocks with their current yields:

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Note: All data is as of Nov 28 closing prices.

Half of the listed above are from Latin America. The dividends offered by the Brazilian utilities vary wildly over months. Just three companies from Europe are represented here because some of the European utilities such as E.ON (EONGY) of Germany now trade on the OTC market.

It must be noted however that many of the stocks mentioned above have fallen over 50% so far this year. So some of the current high yields may not offer consolation for investors who bought the stocks earlier at higher prices. However new investors can use the table as a starting point to do further research into the above global utility stocks.

Disclosure: Long VE