Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Three Secrets to Global Dividend Investing Revealed


Income isn't dead -- you just have to know where to look.

If you want a stable dividend, focus on global companies.

Dividends still matter. But you have to know where to look.

A record-setting 367 companies reduced their dividends during the second quarter, no doubt leading many shell-shocked investors to conclude that income is dead.

But there's more to this story. A total of 283 companies actually said that they boosted their payouts, and an even larger group of companies maintained their current dividend payouts, Standard & Poor's Inc. reported.

Not surprisingly, each of the 2 groups of companies featured some defining characteristics. The companies that had cut their dividends were largely domestic in nature, or at least had a decidedly domestic emphasis. By and large, the firms that were able to maintain or even boost their quarterly payouts were internationally focused, with the potential for some explosive business growth in the world's key emerging economies.

A Tale of 2 Markets

To understand the divergent fortunes of the 2 groups of companies, just look at the divergent performance of the 2 world economies that are most talked about today: the United States and China.

At the time of this dividend report's recent release, the US stock-market benchmark -- the Standard & Poor's 500 Index -- was up a respectable 7.26% so far this year.

By comparison, China's Shenzhen 100 Index had quietly risen 110.10% during that same period.

Such a steep run-up in stock prices often spooks investors. That's understandable. I always evaluate such situations with caution, too.

But while most investors are worried China's stock market could take a tumble, I'd look at it as a minor near-term setback -- and a major long-term profit opportunity.

Even with the double-digit (or triple-digit) run-ups the stocks of many China-based companies have already experienced, many Chinese companies remain stunningly compelling buys -- especially when they feature solid dividend payouts as well.

And China's not the world's only upbeat investing opportunity. The story is much the same in other parts of the world, too. Right now, there are more than 100 international income funds that feature yields of 6% or better.

So how do you tell which companies have a promising payout future and which ones figure to be dividend duds?

There are 3 key areas to examine.

1. International Sales

It goes without saying that fast-developing economies such as those of China and India will almost certainly leave their US, European, and Japanese counterparts in the dust. Therefore, it makes sense to begin the hunt for the world's best dividend players by looking at companies with a significant business exposure to these and other emerging markets.

If this causes you to step out of your investing "comfort zone," well, let's just say that's great

Some 74% of the world's economic activity currently takes place beyond US borders, so it makes no more sense to confine yourself to US-only investments than it does to make the same mistake twice.

My favorites include companies that derive 40% or more of their sales from the Pacific Rim as well as from China. The fact that China's been growing at a double-digit clip for years means that other countries in that region are experiencing spin-off growth. Taiwan, for instance, has solid manufacturing ties with Mainland China -- and the relationship between those 2 one-time political sparring partners is closer than ever, thanks to several trade agreements signed in recent months
< Previous
No positions in stocks mentioned.
Fifteen trades. All profitable. Since launching his Geiger Index trading service late last year, Money Morning Investment Director Keith Fitz-Gerald is a perfect 15 for 15, meaning he's closed every single one of his trades at a profit. And he did this during one of the most volatile periods for the U.S. stock market since the Great Depression. Fitz-Gerald says the ongoing financial crisis has changed the investing game forever, and has created a completely new set of rules that investors must understand to survive and profit in this new era. Check out our latest insights on these new rules, this new market environment, and this new service, the Geiger Index.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos