This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

4 International Cos. Outdo U.S. Counterparts: Total, Sanofi, More

NEW YORK (TheStreet) -- With market volatility rising, many investors are tempted to turn homeward and focus their portfolios on U.S. companies. It's not a bad strategy, but is does miss the mark -- at least if you are looking for high-quality, low-volatility, solid dividend-paying stocks.

Total (TOT), GlaxoSmtihKline (GSK), Sanofi (SNY) and Royal Dutch Shell (RDS.A) are successful internationally based companies with a respectable performance record (lately they've been outstanding performers), good dividend yields and attractive valuations. What's more, they are as easily available to the U.S. investor as if they were domestic stocks. How?  Through American Depositary Receipts, or ADRs.

An ADR makes it as easy for investors to buy shares in a foreign company as it is to buy shares in a domestic one. The ADR is priced in dollars, trades on a U.S. exchange, pays dividends in dollars (the stock's custodian makes the exchange) and the owner of an ADR is not subject to foreign taxes.

ADRs are an often-underutilized tool in diversifying the typical investment portfolio, particularly in gaining international exposure. That said, not all ADRs are the same; as a rule I would avoid the over-the-counter market in favor of those listed on an exchange or quoted on NASDAQ. This is analogous to avoiding penny stocks and sticking with more established enterprises which meet stricter financial reporting standards.

As a side note, at our company we evaluate ADRs with the same criteria as we do domestically based companies. And, for full disclosure, Total, GlaxoSmithKline, Sanofi and Royal Dutch Shell are all part of our "Dividend Buster Program," which focuses on high-quality dividend-paying stocks. The portfolio also includes some great U.S. based companies, such as Johnson & Johnson (JNJ) and Duke Energy (DK).

Evaluating An ADR

Our Dividend Buster Program takes a very disciplined approach to selecting its holdings. We do not discriminate against international companies, but rather focus and seek out those companies that have the following criteria:

  • Strong balance sheet
  • Visible and predictable earnings
  • Above-category growth outlook
  • Dividend paying/raising

All four ADRs examined here meet the above requirements.

On page 2, we analyze these stocks.

 

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,078.58 -94.10 -0.55%
S&P 500 1,984.08 -10.21 -0.51%
NASDAQ 4,510.43 -17.2590 -0.38%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs