|Which high-yield dividend BRIC stocks would you consider for investment? |
As first noted by Goldman Sachs, the fastest-growing economies during the next half-century are going to be Brazil, Russia, India and China -- BRIC, for short. Investing in these emerging markets can provide excellent returns. However, before putting your money to work in companies with exposure to these countries, remember that there are more risks than investing in U.S. stocks. First, the accounting standards in other countries are not as reliable as ours. Second, there are currency and inflation risks. Finally, there are political risks, especially with former Communist countries. Fortunately, there is a way to reduce these risks: by choosing stocks that pay high-yield dividends. At Stockpickr, we keep track of the Highest-Yielding BRIC stocks that trade in the U.S. These are companies that are paying dividends out of their hard-earned cash flows. There are plenty of dividend-paying stocks from China that have ADRs and that trade in the U.S. China is one of the world's oldest civilizations, the birthplace of major inventions such as papermaking, printing, the compass and gunpowder. A very high dividend-payer is Aluminum Corp. of China ( ACH), which purportedly pays a yield of about 7.7%. However, dividend payments at the company have varied greatly; there were two payments in 2006, but only one payment in each year from 2002 to 2005, ranging from 13 cents to 53 cents per share. The company's trailing P/E is 2.6, and its price-to-book ratio for the most recent quarter is 0.7.
Aluminum Corp. of China is one of the stocks owned by the Claymore/BNY BRIC exchange-traded fund. Other Claymore holdings can be tracked by checking out the Claymore/BNY BRIC ETF portfolio on Stockpickr. Another stock with a high-yield dividend is Seaspan ( SSW), which is involved in the transportation of deepsea containers. Although the company was established in the Marshall Islands, its main operations are located in Hong Kong. The company's dividend generates a yield of 6.3% and has been paid out quarterly. Seaspan has a trailing P/E of 35, a forward P/E of 23 and a PEG ratio of 2.5. Take a look at another Chinese high-yield dividend play, Cnooc ( CEO). This oil exploration and development company has a dividend of 3.7%. Cnooc is in great financial shape, with $4.7 billion in cash and less than $200,000 of debt. It has strong financials as well, with a trailing P/E of 9.4 and a PEG ratio of 0.3. Cnooc is owned by Renaissance Technologies, a New York-based hedge fund with excellent returns. Head over to Stockpickr to see the other companies that are part of the Renaissance Technologies portfolio. India is the second-largest country in the world in terms of population, and is the most populous liberal democracy in the world. It also has the fourth-largest economy in the world, and is a great place to find high-yield dividend stocks.
One of those names is Mahanagar Telephone Nigam ( MTE), which provides all types of telecommunications services in Delhi and Mumbai, India. It generates a dividend yield of 3.8%, which is paid twice a year. The company's trailing P/E is a reasonable 15, and its PEG ratio is 2.2. As of the end of the previous fiscal year, Mahanagar had $465 million in cash and no long-term debt. Another India stock that pays a relatively high dividend is Tata Motors ( TTM), which manufactures cars, trucks, buses and other vehicles. It pays a yield of 1.5%. Tata's trailing P/E is a reasonably low 14, its price-to-sales ratio is 0.9 and its PEG ratio is a very decent 0.7. Quarterly revenue growth for the company was in excess of 60% year over year, and quarterly earnings growth was over 30%. This is another stock owned by the Claymore/BNY BRIC ETF, and is also a Ken Fisher stock recommendation. Fisher, who is the founder, chairman and CEO of Fisher Investments, is a strong proponent of diversifying worldwide. His other recent recommendations can be found in the Ken Fisher portfolio on Stockpickr. To round out your India portfolio, take a look at Icici Bank ( IBN). This bank has over 670 branches and operates in more than 12 countries. It offers a dividend of 1.7%. Let's move on to Russia, the largest country in the world in terms of total area. Unfortunately, there are very few Russian ADRs that trade on the New York Stock Exchange, and those that do don't pay dividends. About the only way you can play the Russian market and receive a dividend is through the Central European and Russia Fund ( CEE). This is a closed-end fund that is managed by Deutsche Asset Management International GmbH and invests in a diverse group of sectors in Russia and Eastern Europe.
The dividend calculates out to a very high 10.7%, which includes capital gains. However, the fund has been paying its dividend only once a year, and has paid out in only eight out of the last 10 years. Finally, there is Brazil -- the largest country in Latin America in terms of area and population, and the fifth-largest country in the world. For such a big country, there are very few dividend-paying companies. However, there is Petroleo Brasileiro ( PBR), an oil exploration and production company, which yields 2.5%. It has a trailing P/E of 8.8. For those interested in a Brazilian financial play, there is Banco Itau ( ITU), another member of the Claymore/BNY BRIC ETF. It has a dividend yield of 2.0%. In the mining sector, generating a yield of 1.5%, is Companhia Vale do Rio Doce ( RIO). It is owned by a who's who of the greatest investors ever, including George Soros; super investor Louis Bacon of Moore Capital; and one of Jim Cramer's favorite hedge funds to follow, Atticus Capital -- which is also a big holder of NYSE Euronext ( NYX). You can see the full list of the highest-yielding BRIC stocks on Stockpickr. Another interesting list to track in a related area is the Highest Yielding China Stocks portfolio. And, while you're at it, why not check out the highest-yielding bank stocks and the highest-yielding stocks that pay monthly dividends.