Where to Find Stocks with Yields Double Those in the U.S.
I think it’s one of the market‘s biggest missed opportunities. Every day, millions of U.S. investors are missing out on the world’s highest-yielding securities.
That’s because the vast majority of the world’s highest-yields aren’t found in the United States.
#-ad_banner-#As the chief strategist behind High-Yield International, I’ve spent the past five years scouring the globe for the world’s highest yielding stocks, funds and exchange-traded funds (ETFs). And at last count, my research shows that more than 90% of the world’s highest-yielding stocks are based in international markets. (You can read more of my research about these stocks here.)
That includes companies like global shipping giant Navios Maritime Partners (NYSE: NMM), which yields 13%. And Bermuda-based outfits like SeaDrill (NYSE: SDRL), which pays an impressive 7%.
If you’re like most people, then you’ll probably never take advantage of foreign stocks like these.
That’s a shame, because the average stock in Germany yields 3.6%… Brazil’s average yield is 3.6%… the United Kingdom yields the same… and New Zealand pays 4.8%.
By contrast, stocks here at home yield a paltry 2.1%, on average.
Most U.S. investors dismiss the idea of investing abroad. They tend to think other countries are “riskier” than the United States.
But that’s not the case… especially with one special country I’ll tell you about in a moment, where average yields are double those found in the United States.
A safer way to invest in today’s highest-yielding stocks
In the past couple of years, the United States’ total debt load has topped $15 trillion — and that burden is projected to grow even larger… reaching a total of $22 trillion by 2020.
Like a taxi meter spinning faster and faster, we are slipping $4.2 billion deeper into the hole every day — at a rate of $175 million per hour.
Our credit rating was even knocked down from its golden “AAA” status by Standard & Poor’s.
Now compare that to a country like Australia…
From the mid 1990s through 2007, the Australian government steadily paid down its debts, reducing the nation’s debt-to-GDP (growth domestic product) ratio to less than 10%.
Although Australia took steps to help stimulate its economy amid the financial crisis, the government kept spending under control. As a result, Australia’s debt-to-GDP ratio stood at just under 23% as of the end of last year. Even better, the International Monetary Fund projects that Australia’s government debt-to-GDP will be back under 15% by the end of 2017.
But what’s more, amid all the pain caused by the Great , Australia has truly lived up to its nickname the “Lucky Country”… avoiding recession entirely and emerging from the global downturn largely unscathed.
Throughout the entire economic slowdown, Australia’s GDP only experienced a single quarter of negative economic growth, and that was at the height of the financial crisis in 2009. The country’s growth quickly reaccelerated to a 3% clip in 2010.
That’s part of the reason Australia is one of only eight countries that still sports a perfect “AAA” credit rating by all the major ratings agencies.
Yields that are two times higher than U.S. stocks
But Australia is much more than just a safe place for your money. The country also offers some of the highest yields on the planet.
The average dividend yield of all stocks on the Australian Stock Exchange stands at just under 5%, more than double the 2.1% average yield offered by stocks in the S&P 500.
Take Telstra (OTC: TLSYY), Australia’s equivalent to AT&T (NYSE: T). The telecom offers phone and Internet service around the country.
You’d expect a telecom to pay a substantial dividend. AT&T pays a yield of about 5%, making it one of the S&P’s highest-yielding stocks.
But Telstra pays a yield of nearly 7.5%.
It’s the same story with APA Group (OTC: APAJF). This company is the largest natural gas infrastructure firm in Australia, owning more than 10,000 kilometers of natural gas pipelines, two major natural gas storage facilities and two power plants.
If that business sounds familiar, it’s basically the same as a master limited partnership (MLP) here in the United States. MLPs are known for their high-yields. The largest U.S.-based MLP, Enterprise Products Partners (NYSE: EPD), yields just under 5%.
APA Group? It pays nearly 7%, working in basically the same business.
But Australia is by no means the only country that offers fat dividend yields like these…
The fact of the matter is there is simply a much stronger dividend culture abroad. Individual investors play a larger role in those markets, and they have always demanded more dividends.
Risks to Consider: Don’t get me wrong, I don’t think you should drop everything and put every dollar you have into international high-yielders. The sheer size and scope of the U.S. market still makes it a great place to search for income investments.
Action to Take — > But limiting yourself to only U.S. stocks is like going to a restaurant and limiting your options to just one side of the menu. Sure you can find something you like… but wouldn’t you rather see all the options?
For more on international dividend-payers, I invite you to read my latest presentation, where I’ve also included names and ticker symbols of many high-yield international plays. Visit this link to learn about these stocks now.