Did you know that there are foreign companies out there that sit upon the American stock exchanges in some form just waiting for you to buy them? If not, you’re going to be looking into a whole new world of investing.
As you could probably tell by the title, we’re about to take a look at some British dividend payers. These companies are listed on the NYSE using American Depository Receipts, or ADR for short. You can usually tell when a company is foreign when ADR is listed in parenthesis after the name on sites like Fool.com and Yahoo! Finance.
The British Are Coming!
Actually, they’re already here. Unilever , Diageo , and BT are companies from the UK that have all been listed on the NYSE for some time using those ADRs mentioned above.
These three companies represent three distinct industries. Two of them are truly global companies, and the third is one of the UK’s leading communications providers.
The best way I can think to describe Unilever is by calling it the UK equivalent of Procter & Gamble. Unilever is, of course, a humongous company in its own rights with brands that are recognized around the globe. Ever indulged in Ben & Jerry’s ice cream? Maybe you've used Axe products after getting out of the shower? Those are just two of the brands that make up this international conglomerate.
It’s all well and good having these brands, but the question we really need to ask as investors is if they are growing. Well, they are. Over the last three years, the company has averaged 5.59% revenue growth and 5.74% EPS growth per year. The dividend that the company pays also grew by about 7% per year during that time. The current yield on this $120 billion juggernaut is hovering right around the 3% mark.
There’s no doubt in my mind that you could make quite a pretty penny with the growth and dividends that this conglomerate is likely to bring you.
Time To Party!
When it comes to alcohol, Diageo has got you covered. The company carries some of the most recognized brands in the world. Smirnoff, Crown Royal, Bailey’s and Guinness can all be found on Diageo’s brand sheet.
As you probably suspected, the alcohol business is doing quite well for Diageo. The company has a 24% profit margin and managed sales of $16.5 billion in 2012. That’s up quite significantly from the 2011 value of $15.2 billion, and even 2008 sales of $12.4 billion.
Like almost every company I consider investing in, Diageo pays a dividend. The yearly dividend amount has been growing steadily over the past decade and stockholders are currently collecting a 2.4% yield.
I see Diageo as the Coca-Cola of the alcohol industry. Most of their brands, including Smirnoff, are known around the globe to millions, if not billions, of people.
Analysts expect to see 10% growth in sales from this company in each of the next two years. I don’t doubt that for one second. As the company pushes the reach of their brands to the farthest ends of the globe you can sit back and watch your money grow while collecting a nice dividend.
The Telephone Is Ringing
BT is one of the world’s largest communications companies. Despite the name, they happen to provide services to more than 170 countries. Services such as wired phone lines, cellular connections, TV, broadband, and networked IT services are provided.
Sales at BT have tapered off slightly as of the close of the most recent fiscal year. They came in at $29 billion. The peak of sales came in 2009 when the company managed $32.8 billion.
Despite the drop in sales, net income has actually risen since 2008 when it was at $2.66 billion. Fiscal year 2012 net income at BT was $3.07 billion.
This company pays a dividend, although it’s not quite the same as what you could get with the telecom companies here in the States. The current yield is 3.28%, so that isn’t something to scoff at.
Going forward I think the two companies most poised to give you the best ROI are Unilever and Diageo. I think both companies offer a great set of brands with worldwide recognition.
When it really comes down to picking the best, I’d have to say Diageo. Alcohol has long been a staple in cultures around the globe and Diageo is one of the best-positioned companies in the space. Diageo also pays a nice dividend to anyone willing to hold on to the stock.
I think when it comes to BT there are plenty of other telecom companies out there more worthy of the investment. Verizon and AT&T are two companies that instantly come to mind. Sure, they’re not foreign, but they do pay solid dividends, and they’re incredibly stable.
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