Look Overseas For Dividend Opportunities

But by looking abroad, investors can get much better payouts without more risk—even as a fiscal crisis looms in Europe and emerging markets face slowing growth.That's because tumbling stock markets outside of the U.S. have priced in some of the risks. At the same time, falling markets overseas have boosted "dividend yields," or dividend payments as a percentage of stock prices.

Investors who chase higher yields in the U.S. face added risk, because many of the companies that pay a lot are troubled in some way—and might not be able to boost, or even sustain, their dividend payments in the future. Consider that, over the past year, the 50 U.S. companies with the highest yields among the Standard & Poor's 500-stock index have produced only one-fifth the dividend payment growth of the next 50 companies. In other words, investors seeking plump yields can either look through the scratch-and-dent bin in the U.S. or choose among top-quality merchandise in other markets.

Source: Wall Street Journal

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