{"id":24001,"date":"2011-09-22T08:08:22","date_gmt":"2011-09-22T12:08:22","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=24001"},"modified":"2011-09-22T08:08:22","modified_gmt":"2011-09-22T12:08:22","slug":"forget-treasuries-buy-these-12-yields-instead","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/09\/22\/forget-treasuries-buy-these-12-yields-instead\/","title":{"rendered":"Forget Treasuries — Buy These 12% Yields Instead"},"content":{"rendered":"

By DividendOpportunities.com<\/a><\/strong><\/p>\n

Forget Treasuries — Buy These 12% Yields Instead<\/strong><\/span><\/p>\n

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 that can’t even turn a profit. If it’s offering a yield that sounds too good to be true, it probably is.<\/span><\/span><\/p>\n

And you’d be right most<\/em> 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 gives a higher dividend yield. That means profitable companies paying yields this high should be rare.<\/p>\n

In fact, my staff and I recently ran the numbers. When we looked only at the companies that turned a profit over the last year, we found just 18 U.S. common stocks paying yields of more than 12%. Here, you can see them for yourself:<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Ticker<\/span><\/strong><\/td>\n Company<\/span><\/strong><\/td>\n Yield<\/span><\/strong><\/td>\n<\/tr>\n
IVR<\/span><\/td>\nInvesco Mortgage<\/span><\/td>\n19.7%<\/span><\/td>\n<\/tr>\n
AGNC<\/span><\/td>\nAmerican Capital<\/span><\/td>\n19.7%<\/span><\/td>\n<\/tr>\n
CYS<\/span><\/td>\nCYS Investments<\/span><\/td>\n18.8%<\/span><\/td>\n<\/tr>\n
RSO<\/span><\/td>\nResource Capital<\/span><\/td>\n17.8%<\/span><\/td>\n<\/tr>\n
CIM<\/span><\/td>\nChimera Investment<\/span><\/td>\n16.6%<\/span><\/td>\n<\/tr>\n
TWO<\/span><\/td>\nTwo Harbors<\/span><\/td>\n16.2%<\/span><\/td>\n<\/tr>\n
LPHI<\/span><\/td>\nLife Partners Holdings<\/span><\/td>\n15.4%<\/span><\/td>\n<\/tr>\n
NLY<\/span><\/td>\nAnnaly Capital<\/span><\/td>\n15.0%<\/span><\/td>\n<\/tr>\n
CMO<\/span><\/td>\nCapstead Mortgage<\/span><\/td>\n15.0%<\/span><\/td>\n<\/tr>\n
HTS<\/span><\/td>\nHatteras Financial<\/span><\/td>\n14.7%<\/span><\/td>\n<\/tr>\n
ANH<\/span><\/td>\nAnworth Mortgage<\/span><\/td>\n14.1%<\/span><\/td>\n<\/tr>\n
MFA<\/span><\/td>\nMFA Financial<\/span><\/td>\n13.2%<\/span><\/td>\n<\/tr>\n
PSEC<\/span><\/td>\nProspect Capital<\/span><\/td>\n13.0%<\/span><\/td>\n<\/tr>\n
AI<\/span><\/td>\nArlington Asset<\/span><\/td>\n12.9%<\/span><\/td>\n<\/tr>\n
FSC<\/span><\/td>\nFifth Street Financial<\/span><\/td>\n12.3%<\/span><\/td>\n<\/tr>\n
BKCC<\/span><\/td>\nBlackRock Kelso Capital<\/span><\/td>\n12.2%<\/span><\/td>\n<\/tr>\n
BRBI<\/span><\/td>\nBlue River Bank Shares<\/span><\/td>\n12.1%<\/span><\/td>\n<\/tr>\n
DX<\/span><\/td>\nDynex Capital<\/span><\/td>\n12.0%<\/span><\/td>\n<\/tr>\n
*As of August 3, 2011, according to Bloomberg<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

But did you know there are actually hundreds<\/span> of 12%-plus yields out there from profitable companies? The difference is that many investors just don’t know where to find them. <\/span><\/p>\n

That’s because the majority of the world’s highest yields aren’t being paid by U.S. companies. My recent search found 412 additional stocks out there yielding 12% or more… all coming from international-based companies.<\/strong><\/span><\/p>\n

That means many income investors are essentially missing out on 96%<\/span> of the highest yields before they even get started.<\/p>\n

That’s right, if you want high yields, you have to look at international companies.<\/p>\n

\"\"I’ve researched this topic for years. And the fact is, foreign companies are simply paying higher yields across the board. <\/span><\/p>\n

Take a look at the table to the right. <\/span><\/p>\n

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<\/span> over the past year.<\/p>\n

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.”<\/span><\/p>\n

On a macro scale, the difference is striking. While the average yield for all stocks in the S&P 500 is just 2.0%, Germany’s average yield is 3.6%… Brazil’s average yield is 4.1%… the United Kingdom yields 3.4%… Australia yields 4.5%… New Zealand pays 4.4%.<\/p>\n\n\n\n
\u00a0 <\/ins><\/ins><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

But where you really start to see a dramatic difference is when you look at some individual examples of higher yields abroad.<\/span><\/p>\n

Take banks, for instance. Here at home, Bank of America (NYSE: BAC<\/a>)<\/strong> used to pay investors $2.56 per share before the financial crisis. That represented a yield of more than 6.0%.<\/p>\n

Of course, we all know what happened next. Today, BAC pays a laughable $0.01 (yes, one penny) each quarter.<\/p>\n

But it’s a completely different story outside the United States.<\/p>\n

Santiago, Chile-based CorpBanca SA (NYSE: BCA<\/a>)<\/strong> is a perfect example.<\/p>\n

Chile’s largest bank, CorpBanca offers commercial and retail banking through more than 100 offices. The bank also offers mutual fund management, insurance, and securities brokerages through a network of subsidiaries. Not only have the shares soared over the past five years, but dividends now total $1.66 per share each year. That gives the stock a yield of over 8.0% at recent prices, and you can buy the stock on the New York Stock Exchange.<\/p>\n

It’s the same thing for utilities. They are some of the best places to search for yields in the U.S. North Carolina’s Duke Energy (NYSE: DUK<\/a>)<\/strong> pays a yield of about 5.0%. But even that is topped by international utility stocks like Germany’s E.ON AG (OTC: EONGY)<\/strong>.<\/p>\n

E.ON AG is the world’s largest energy provider. It serves over 26 million customers and employs more than 75,000 people. Its shares pay investors $2.16 a year, for a yield of over 10.0%… that’s about twice as much income as the average utility here in the U.S.<\/p>\n

Still, most U.S. investors are simply unaware that they’re missing out on high yields like these.<\/span><\/p>\n

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.<\/p>\n

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?<\/p>\n

Now, not every one of the 412 is available stateside, but don’t worry, you can buy many of these without<\/span> even leaving the U.S. markets.<\/p>\n

I have more details — including several names and ticker symbols<\/strong> — in a presentation<\/a><\/strong> I recently put together. Visit this link to watch now<\/a><\/strong>.
\n
\nAll the best,<\/span><\/p>\n

\"\"<\/p>\n

Paul Tracy
\nStreetAuthority Co-founder, Chief Investment Strategist — High-Yield International<\/em><\/p>\n

P.S.<\/strong> — <\/em>Remember, you can learn more about investing in high-yielding international stocks — including several names and ticker symbols<\/strong> — by watching this presentation<\/a><\/strong>.<\/p>\n

Disclosure:<\/strong> StreetAuthority holds shares of ANH among its various model portfolios.<\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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 that can’t even turn a profit. If it’s offering a yield that sounds too good to be true, it probably is.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-24001","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=24001"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/24001\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=24001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=24001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=24001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}