The quest for high foreign dividends

“How come no one ever writes about income investing outside the U.S.?” One reason may be that investors don’t have to go to foreign corporations for global dividends. Many U.S.-based dividend payers earn lots of their revenue overseas — Philip Morris International (PM) is legally headquartered in New York but gets 100 percent of its revenue selling Marlboros and other tobacco products outside of the 50 states. Its yield is currently 4.6 percent.

But for those with more exotic tastes, there are more direct ways to buy global dividends. Plenty of foreign companies trading on American exchanges through ADRs offer good dividends. There are also exchange-traded funds (ETFs) and mutual funds focused on foreign dividend stocks. The attraction of some of these stocks — in addition to any prime business fundamentals — is uncommonly high yields. According to Factset data, the dividend yield for the MCSI EAFE, an index of developed market firms outside the U.S. and Canada, was 2.93 percent through December 31, 2010, compared to 1.86 percent for the U.S.-focused S&P 500.

Source: Reuters

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