Where To Find The World’s Highest Yields
Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case. If it’s offering a yield that sounds too good to be true, it probably is.
And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price leads to a higher dividend yield. That means profitable companies paying yields this high should be rare.
#-ad_banner-#My staff and I recently ran the numbers… When we looked only at the companies that turned a profit over the past year, we found just 119 U.S. common stocks paying yields of more than 12%.
But did you know there are actually 204 other stocks that yield 12% or more? The difference is that many investors just don’t know where to find them.
That’s because the majority of the world’s highest yields aren’t being paid by U.S. companies. My recent search found 204 additional stocks out there yielding 12% or more… all coming from international-based companies.
That means many income investors are essentially missing out on twice as many high-yielders before they even get started.
I’ve researched this topic for years. And the fact is, foreign companies are simply paying higher yields across the board.
Take a look at the table below.
|Number Of Income Stocks: U.S. vs. World|
You can see the difference between what we get from U.S. companies and what’s available from international companies. Keep in mind that I only looked at the common stocks of companies that were profitable over the past year.
As Judy Sarayan, a fund manager at mega-investment firm Eaton Vance explained, “There’s a much stronger dividend culture abroad… individual investors play a larger role in those markets, and they have always demanded more dividends.”
On a macro scale, the difference is striking. While the average yield for all stocks in the S&P 500 is just north of 2.0%, the U.K.’s average dividend yield is 4.1%… Australia’s average yield just tops 5%… and New Zealand leads the way with an average dividend yield of nearly 5.3%.
But where you really start to see a dramatic difference is when you look at some individual examples of higher yields abroad.
Take banks, for instance. Here at home, Bank of America (NYSE: BAC) used to pay investors $2.56 per share before the financial crisis. That represented a yield of more than 6.0%.
Of course, we all know what happened next. The financial crisis happened, and Bank of America was forced to eliminate its dividend as a result. Today, BAC pays a laughable $0.05 (yes, five cents) each quarter.
But it’s a completely different story outside the United States.
Madrid, Spain-based Banco Santander (NYSE: SAN) is a perfect example.
Santander is among the world’s largest banks — it’s even ranked in the top 50 of Forbes’ list of the world’s largest companies. In total, Santander takes in a staggering $39 billion in revenue each year.
Today, the company paid a total of $0.44 per share in dividends in the past year. That gives the stock a yield of about 9% at recent prices.
And this is just one isolated example. I could go on and on…
Still, most U.S. investors are simply unaware that they’re missing out on high yields like these.
I want to make something clear, though. I don’t think you should drop everything and put every dollar you have into international high-yielders. Truth is, the size and scope of the U.S. market makes it a great place to search for income investments.
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?
And one more thing — not every one of the 204 stocks is available stateside, but don’t worry, you can buy many of these without even leaving the U.S. markets.
I have more details — including several names and ticker symbols — in a special report I recently put together. You can visit this link to read it now.