March 11, 2012 by staff
Dividend-paying Stocks, Brighter economic prospects are attracting U.S. investors to shares of foreign companies, but most of the attention is being given to big multinational players that happen to be based outside of the U.S. As a result, many companies that lack such global clout are being neglected even though they offer substantial dividends and value.
Stock investors should focus on the quality of a company’s earnings, says Bob Olstein, manager of Olstein All Cap Value Fund. He talks with Jonathan Burton about two favorite buys.
The top foreign stocks held by U.S. mutual funds that invest overseas includes the American Depositary Receipts of well-known enterprises such as Royal Dutch Shell PLC /quotes/zigman/379078/quotes/nls/rds.a RDS.A -1.73% /quotes/zigman/359915 UK:RDSA +0.13% , America Movil SAB de CV /quotes/zigman/276628/quotes/nls/amx AMX -0.72% , Teva Pharmaceutical Industries Ltd. /quotes/zigman/64731/quotes/nls/teva TEVA +0.18% and Vodafone Group PLC /quotes/zigman/101873/quotes/nls/vod VOD -1.56% /quotes/zigman/421253 UK:VOD -0.91% , according to investment researcher Morningstar Inc.
“These stocks are all in sectors that are cyclical and kind of in favor right now,” said Allan Nichols, a Morningstar senior equityanlyst. Most, he added, pay “decent dividends and generate stable cash flows.” Shell’s dividend yield recently was 4.7% and American Movil’s was 1.1%, while Teva yielded 1.8% and Vodafone 3.5%.
American Depositary Receipts, or ADRs, are an easy, cost-effective way to own non-U.S. stocks. These shares of foreign companies are listed on U.S. exchanges, offering greater transparency, no foreign transaction costs and decent trading liquidity.
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