The World Is A Big Place For Dividend Investors: Here’s Where To Look

Dividend stocks offer investors a steady stream of cash payments which makes it ideal for long-term investors looking to accumulate wealth. But not all dividend stocks are equal and some companies listed on far-away exchanges offer superior returns. Investors are always encouraged to look beyond their borders and seek international stocks that not only offer a regular cash payout but the ability to realize incremental gains through foreign currency appreciation.

Political Stability In Canada

Canada arguably offers global investors one of the most stable political climates in the world. The U.S. Senate is currently undergoing a trial to impeach a sitting president, the United Kingdom is completely removing itself from the European Union as part of a multi-year long journey, Japan’s economy continues to undergo deflation and faces an aging population, while riots and protests are dominating the streets in France.

But in Canada, the biggest controversy dominating global news headlines is the Prime Minister splurging on donuts. In fact, international dividend investors with exposure to Canadian stocks walked away with an extra 5% return in 2019 from the currency’s appreciation.

One of the more notable dividend stocks beloved by dividend investors is the Royal Bank of Canada. The global bank has increased its dividend payout in each of the past nine years at an average rate of 7% over the past five years. The stock ended 2019 near historic all-time highs and offers investors an attractive 4% dividend yield.

BCE is another popular dividend stock that rebounded from 2018’s multi-year lows and continues to offer a 5% yield. The company operates within a tightly regulated wireless communication and pay-TV segment and has increased its dividend annually for more than a decade.

Finally, Canadian energy giant Enbridge offers investors a dividend yield north of 6% thanks to another increase to its payout in 2019. The company has exposure to renewable energy which makes it a safer investment compared to pure-play oil and “dirty” energy companies.

A New Era In U.K.

Brexit dominated media headlines since the 2016 election but for many U.K.-based companies, it was business as usual. Global dividend investors could still find pockets of opportunity in the U.K., especially if the pound continues to rebound after hitting a multi-decade low of $1.22 U.S. in 2019.

Scotland-based SSE plc is an energy company whose stock gained around 40% in 2019 and continues to offer a very attractive 7.5% dividend yield. Even investors who took a hit from the currency volatility in 2019 could have still ended the year in the green.

Another dividend stock that caught investors’ attention in 2019 was telecom company BT Group. Ahead of the 2019 Prime Minister election, the Labor Party’s Jeremy Corbyn campaigned on nationalizing companies like BT so the government can offer citizens free broadband. The public resoundingly rejected the Labour party and the company faces a much more friendly environment in 2020 and beyond — on top of a 9% dividend yield.

Opportunities Across Europe

France’s Total SA ranks among the small handful of global “Supermajor” oil companies. Despite weak oil prices, the company announced in April a 3.1% increase to 2019’s dividend which yields just shy of 5%. Dividend investors looking for growth are attracted to the company who promised a 5% to 6% increase in 2020 and beyond. In addition, the company pledged to continue buying back its own stock even in $60 per barrel environment.

Neighbouring Germany is a global economic powerhouse and home to many companies beloved by global dividend investors. For example, Freenet has been growing its dividends by more than 3% on average over the past five years and currently offers a yield above 8%.

Other examples that can be found across Europe include Spain’s principal natural gas carrier Enagas which offers a 7% yield.

Looking Down Under

Down under in Australia, Harvey Norman Holdings investors aren’t rushing to sell their stock after a more than 30% return in 2019. The reason is simple: the dividend yield remains north of 7% thanks to an average five-year dividend growth rate of more than 20%.

Other Australian stocks global investors are watching include Alumina Limited which offers the largest yield among major stocks at more than 11%.

Professionally Managed Fund

Investors looking for exposure to dividend stocks without doing their homework should find the iShares Emerging Markets Dividend Exchange Traded Fund (ETF) particularly interesting. As the name suggests, the ETF consists of a basket of stocks located in more than a dozen countries whose economies are classified as emerging.

More than 30% of the holdings are Chinese companies, including e-commerce behemoth Alibaba, and communication and media giant Tencent Holdings. Other countries included in the fund includes South Korea, Taiwan, India, Brazil, among others. The ETF currently offers investors a 4.4% dividend yield.

Investors looking for similar professionally managed funds have plenty of other options to choose from, including the iShares International Dividend Growth ETF, the iShares MSCI EAFE Growth ETF, or the Vanguard Total World Stock ETF.

Bottom Line

The investment universe is a big place and dividend investors are blessed with the opportunity of allocating their money towards the best opportunities wherever they may be. Dividend stocks share similar characteristics wherever they may be as wanting to keep their investor base happy through steady payouts and annual increases.