Australian ADRs offer Awesome Dividends Now

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The Australian Stock Market Index,”ALL ORDINARIES INDEX” has crashed in the past few weeks in-line with other markets of the world. Year-to-date “Bank of New York Mellon Australia ADR Index”, which tracks the Australian ADRs listed in the US, is down 54.94%.

1-Year Chart of Australian All Ordinaries Index

On the currency front, the Aussie Dollar has fallen a whopping 37% against the US $ since reaching a peak of $0.9849 to the US$ about 3 months ago.London’s Financial Times calls the Australian Dollar the “whipping boy” of foreign exchange markets (Source:World gives Aussie dollar a walloping).

From a article titled “When will the Australian sharemarket recover?” by Nicolette Rubinsztein, here is a table of the major downturns in Australia since 1987:

Against the backdrop of all the above events,US investors are wondering whether now is the good time to pick up some Aussie stocks available here as ADRs. We do not know when the market will recover worldwide. Despite being a surplus country Australia got hit pretty bad just like all other countries in this credit crunch. However there are some high quality dividend yielding stocks that will survive this downturn and come back strong when the dust settles.

The following are six Australian stocks that have excellent dividend yields now. While its not a good idea to jump in with both feet into these stocks just for the dividends it must be noted that further erosion in stock prices is possible. An investor with a well diversified portfolio may want to monitor these stocks and add a little when desired.

Austrlian Stocks with Excellent Yields now (as of Oct 24,2008):

1. Alumina – AWC
Dividend Yield: 12.86%

2.BHP Billiton Ltd – BHP
Dividend Yield: 5.28%

3.SIMS Group Ltd – SMS
Dividend Yield: 9.95%

4.Westpac Banking Corp – WBK
Dividend Yield: 9.58%

5.National Australia Bank Ltd – NABZY
Dividend Yield: 12.69%

6.Australia & New Zealand Banking Group Ltd – ANZBY
Dividend Yield: 11.60%

The last two are traded on the OTC markets.

Global Stocks under $10 and Dividend Yield >= 5%

Many foreign stocks that have great dividend yields are now trading under $10. The following is a list of such stocks that meet the conditions:Stock Price (as of Oct 24,2008) : < $10
Dividend Yield: Greater than or Equal to 5.00%

Dividends may be cut or reduced at any time. However in this market dividend paying stocks are a safer bet than the ones that don’t pay dividends.

1. Ternium S.A. (ADR) – TX
Dividend Yield = 5.43%

2.Taiwan Semiconductor Mfg. Co. Ltd. (ADR) – TSM
Dividend Yield = 7.05%

3.Tomkins plc (ADR) – TKS
Dividend Yield = 12.83%

4.Turkcell Iletisim Hizmetleri A.S. (ADR) – TKC
Dividend Yield = 5.22%

5.Telefonica de Argentina SA (ADR) – TAR
Dividend Yield = 38.36%

6.Banco Santander, S.A. (ADR) – STD
Dividend Yield = 8.34%

7.Grupo Radio Centro SAB de CV (ADR) – RC
Dividend Yield = 8.10%

8.Portugal Telecom, SGPS (ADR) – PT
Dividend Yield = 13.71%

9.Hellenic Telecom Organization S.A. (ADR) – OTE
Dividend Yield = 8.75%

10.Korea Electric Power Corporation (ADR) – KEP
Dividend Yield = 6.36%

The Top 10 Global Food Stocks

VeggiesInvestors are attracted to defensive sector stocks for their stability and consistent growth.One of the defensive sectors is the food producers. Some of these stocks have held up well during the past few months.

In this post lets review the Top Ten Global Food Producer stocks. This ranking is based on the total revenue generated in 2007 by each food producer and was compiled by a company called DataMonitor. Seven out of the top ten are US companies.

The Top 10 Global Food Companies

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1.Nestle SA (NSRGY) is the largest food producer in the world. Nestle’s brands covers all food and beverage types.Some of the famous Nestle brands include KitKat,Nescafe,Hot Pockets,Dog Chow & Purina(Pet Foods),etc.The stock is one of the most traded on the OTC market and pays a dividend of 3.09%.

2.Cargill Inc is a privately-held company.

3. The USA-based Kraft Foods Inc. (KFT) operates sells its products in more than 150 countries.Kraft was spun-off from Altria Group. Kraft has an yield of 4.28% and the annual dividend growth over the last 5 years is 13.18%. The profit margin is only 6.15% and the beta is 0.6. Some of Krafts brands are Oreo, Ritz, House,Planters, Easy Mac,etc.

4.Unilver NV (UN) is an Anglo-Dutch multi-national company with operations in 100 countries and owns over 400 brands in foods,beverages, cleaning agents and personal care.Some of the famous brands are Lipton,Knorr,Ben & Jerry’s and Breyers Ice-creams, Dove, Rexona, Slim-Fast,etc. Unilever pays a dividend of 6.74% Profit margin is 10.57%, better than Kraft Foods Inc.Annual dividend growth over the last 5 years is 21.42%. Unilever’s UK division trades with the ticker UL in New York Stock Exchange.

5.Tyson Foods Inc (TSN) produces and distributes meat and poultry products. TSN has a low dividend yield of 1.66% and over the last 5 years revenue growth has been flat.The company is below average in managing their resources and hence Return on Assets,Revenue per Employee, Return on Equity are all below it’s peers.

6.PepsiCo Inc (PEP) is a global beverage and snack company based in the USA.PepsiCo’s brands owns hundreds of brands including Quaker Oats, Pepsi,Gatorade,Lay’s Potato Chips,Diritos,Tropicana,AquaFina, etc. The current yield is 3.28% and the profit margin is 13.26%. Earnings have grown at15.38% annually over the last 5 years and it has raised dividends by 19% annually in the same period.

7.Minneapolis,MN-based General Mills, Inc (GIS) is a manufacturer and marketer of many consumers foods including Cheerios,Wheaties, Pillsbury,Haagan Daas Ice Cream,Betty Crocker,Progresso,etc. GIS has a dividend yield of 2.68%.The profit margin is 8.28% and earnings have grown annually at 8.86%.

8.Based in Paris,France Groupe Danone (GDNNY) is a producer of fresh dairy products, biscuits,cereals,etc. Some of its brands include Evian water,Activia and Dannon,Danone yogurts,etc.The OTC market listed GDNNY’s dividend yield is 3.21% and the profit margin is 9.91%. Danone’s yogurt lines are a favorite among female consumers due to health benefits.

9. Kellogg (K) is a leader in the manufacture and marketing of cereals and convenience foods. K pays a dividend of 2.82% and the average annual earnings growth rate is 9.5%.Some of its competitors are Heinz,General Mills,Campbell Soup Inc. Kellogg’s products are sold in more than 180 countries and some of its brands are Pop-Tarts,Froasted Flakes,Special K,Graham Crackers,Keebler Cookies,etc.

10.The USA-based ConAgra Foods(CAG) company is a leading packaged food company with many brands such as Healthy Choice, Chef Boyardee, Egg Beaters, Hunt’s, Orville Redenbacher’s, PAM,Reddi-WIP, etc.The current yield is 4.52% and the revenue growth over the past 5 years is 12.85%. The dividend yield paid is in-line with its peers in the food-processing industry.

Disclosure: Long GIS

India’s Sensex – The Wild Ride Continues

India’s stock market index Sensex closed below 10,000 again yesterday. The 2-year chart is ugly as shown below.

India Stock Market Index – Sensex Chart2-Years:

Sensex Chart 2 Years

The following are my past articles about the stock market there:

India: Making Sense of the Sensex bubble

Recently I wrote:

The Incredible India Growth Story – Interrupted

ETFs: The Complete List of India ETFs and ETNs Trading on the US Markets

List of Mexican ADRs !

Mexico

Mexican stocks seem to be holding well compared to other emerging markets like Chile, Brazil,Argentina,etc. The MSCI Mexico Investable Market Index Fund ETF (EWW) is down year-to-date 17.21%.

The following table lists the ADRs from Mexico:

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