Eight Strong ADR Stocks

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ArnoldMany stocks have fallen over 50% year to date in this bear market.There are not that many foreign ADR stocks that are up so far this year.The following are eight ADR stocks that are in the positive column year-to-date. Four of them trade on the NYSE and the rest in the NASDAQ. Some of these stocks may not be good investment candidates. This list can be used as a starting point for further detailed research.

Stocks that are UP year-to-date (as of Oct 19,2008):

1.Company Name: VisionChina Media
Ticker: VISN
Country: China
Year-To-Date Change : 46.71%

2.Company Name: Epcos
Ticker: EPC
Country: Germany
Year-To-Date Change :35.92%

3.Company Name: ILOG
Ticker: ILOG
Country: France
Year-To-Date Change :24.02%

4.Company Name: Soc. Quimica y Minera de Chile
Ticker: SQM
Country: Chile
Year-To-Date Change :22.74%

5.Company Name: Netease.com
Ticker: NTES
Country: China
Year-To-Date Change :19.41%

6.Company Name: Endesa-Empresa Nacional de Electricidad
Ticker: EOC
Country: Chile
Year-To-Date Change :8.20%

7.Company Name: ICON
Ticker: ICLR
Country: Ireland
Year-To-Date Change :4.88%

8.Company Name: Telefonos de Mexico
Ticker: TMX
Country: Mexico
Year-To-Date Change :3.32%

It is interesting to see none of the above stocks are widely known or bank stocks.

Three Dividend Aristocrats of Europe

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Stocks that pay dividends are always better than the ones that don’t pay.Its true that dividends are not guaranteed and that they can be reduced or canceled at any time. Companies like Washington Mutual(WU), National City(NCC), Bank of America(BAC) are some recent examples.However in the long run, dividends form a significant part of a stock’s total return (Total Return = Dividend Return+ Stock Price Appreciation).

One of the ways of identifying is to select stocks from the Dividend Aristocrats Indices published by S&P.; The S&P; Europe 350 Dividend Aristocrats Index contains “large cap, blue chip companies within the S&P; Europe 350 that have followed a policy of consistently increasing dividends every year for at least 10 consecutive years.” Three stocks from this index is listed below:

1. NOVO NORDISK A S (NVO) is a Denmark-based health care company specializing in the care of diabetes. The current yield is 1.90% and the P/E is 22.16. NOV had a total revenue of $7.8B last year and the stock has a 5-star rating by S&P.; Dividends have increased at about 20% annually over the past 5 years.

2.Basel,Switzerland based Novartis AG (NVS) is a drug company manufacturing a variey of medicines.NVS has been almost flat over the past 52 weeks.Earnings growth in the past 5 years is 12.5%. NVS pays a dividend of 3.02% and it has a market cap of $119B with 2.3B shares outstanding.

3.SANOFI-AVENTIS SA(SNY) is a Biotechs and Drugs firm in France. SNY has a dividend yield of 5.55%. It markets Ambien CR, the famous drug for insomnia. SNY has fallen about 32% in 52-weeks. Dividends has increased at an annual rate of 26% over the last 5 years.

The Incredible India Growth Story – Interrupted

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Taj Mahal

Taj Mahal, India

The main stock market index in India called the Sensex plunged 606 points to close below the psychologically important level of 10,000 at 9975 yesterday(Oct 17th). After reaching a peak of 21,200 in January the index has fallen by 53% in just nine months.

Similar to the other three BRIC countries, India rode the wave up during the past few years and now the market has been hit hard as the commodity-driven economies have crashed. Foreign investors are pulling out their investments from Indian companies on a daily basis. Out of a total market cap of $680 for the entire market, foreigners have invested about $55B. Spooked by the crash in Sensex and markets worldwide local investors are getting out as well. The theory that somehow India was decoupled from other markets has been put to rest.

The last time Sensex saw the below 10,000 level was in July 2006. The P/E of the Sensex has come down to 12.6 from 28.5 back in January.While the main index has fallen 53% year-to-date this year,some stocks have fared even more. The following table lists the Indian ADR stocks traded in the US and their performance:

Indian Stocks Year-To-Date Change

[TABLE=111]

Chart
Click on image to enlarge

India-ADRs-Change

As seen in the above chart, some of the stocks like IBN, TM are down over 70%.IT services stocks like SAY,WIT,INFY seems to be holding well now.But they may face tough times if US companies reduce or cancel off-shoring projects.

Due to domestic and overseas market conditions the index may take some time before finding a stable level. While in the long-term “The Incredible India Growth Story” may be intact,however in the short-term it has been interrupted.

Factsheets Repository

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Here you can find the factsheets and constituent lists of select indices. These lists can are a good source to identify some quality stocks. To open an index click on the appropriate link below.

Note: This list will be updated regularly.So check back often.

Factsheets Repository of Select Indices (Updated Jan 12,2009):

A. CANADA

1.SP-TSX-Composite-Index

2. S&P/TSX Canadian Dividend Aristocrats Index

Definition: “The S&P/TSX Canadian Dividend Aristocrats index is designed to measure the performance of S&P/Citigroup Broad Market Index (BMI) Canada constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least seven years. Since 1956, dividends have notably contributed 30% of the total equity return of the S&P/TSX Composite index, while capital gains accounted for the remaining 70%. The S&P/TSX Canadian Dividend Aristocrats index captures both sustainable dividend income and capital appreciation potential which are both key factors in investors’ total return expectations.”

Factsheet

S&P/TSX Canadian Dividend Aristocrats Constituents

B.USA
1.SP 500 Index:

S&P 500 Index Factsheet

S&P 500 Index Constituents

2.S&P 500 Dividend Aristocrats Index:

Definition: “S&P 500 Dividend Aristocrats is designed to measure the performance of S&P 500 index constituents that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years. This index is a member of the S&P Dividend Aristocrats index series.”

FactSheet

S&P 500 Dividend Aristocrats Index Constituents

3. S&P High Yield Dividend Aristocrats Index

Definition:”S&P High Yield Dividend Aristocrats is designed to measure the performance of 50 highest dividend yielding constituents that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years. This index is a member of the S&P Dividend Aristocrats index series.”

Factsheet

S&P High Yield Dividend Aristocrats Index Constituents

C.Latin America
1. S&P 500 Latin America 40 Index

S&P 500 latin america 40 Constituents

D.Europe

Eu Flag

1. S&P Europe 350 Dividend Aristocrats

“S&P Europe 350 Dividend Aristocrats is designed to measure the performance of S&P Europe 350 index constituents that have followed a policy of consistently increasing dividends every year for at least 10 consecutive years. This index is a member of the S&P Dividend Aristocrats index series.”

Factsheet

S&P Europe 350 Dividend Aristocrats Constituents

2. Dow Jones Germany Select Dividend 20 Index

3. S&P Europe 350 Index

4. Dow Jones Germany Titans 30 Index

5. Dow Jones Country Titans Index

Solid Long-Term Dividend Stock: Bank of Nova Scotia

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Scotia Bank Logo

During bear markets some investors try to analyze their portfolio holdings to determine which stocks to hold for the long-term and which stocks to trim down or sell out even if they are at a loss. Large cap companies that pay solid dividends and have consistent
long-term performance are the favorites for such investors.While its true large cap stocks like AIG, WB have collapsed recently, its highly unlikely that the majority of the stocks that meet the above two criteria will go under.

Bank of Novo Scotia (BNS) is one company that may a solid long-term holding in a well-diversified portfolio. The following are some reasons why you may want to hold BNS or the long-term (many years):

  • Has paid dividend every year since 1832.
  • Increased dividends in recent years (2005,2006,2007 and 2008).
  • Consistent dividend increases among major Canadian companies.
  • International presence in countries like Mexico,Peru,Chile,Jamaica,etc.
  • One of the top five large Canadian banks.
  • High Payout Ratio (> 33%).
  • Well diversified in three business areas: Domestic Banking,International Banking and Capital Markets.
  • Makes higher profits from revenues than most other peer banks.
  • Constituent of the main Canadian Market Index (S&P/TSX Composite Index).

Disclosure: Long BNS