U.S. dividend investors should think outside the box in finding undervalued dividend stocks…Foreign stocks now provide higher dividend yields than their U.S. counterparts, especially in Europe. Although many of these ADRs (American Depository Receipts) have infrequent trading and also tax implications, it is well worth casting your net across the world to find dividend gems. This article identifies 13 French ADRs that pay a yield that is higher than 2.5 percent and has a market cap above 15 billion.
Written by TheDividendManager.com
Below is the chart of the CAC40 index versus the Dow Jones Industrial Average. As you can see, French stocks have underperformed by a sizable margin, especially since early last year.
In examining French stocks, I ran a screen of those companies that pay a yield that is higher than 2.5 percent and has a market cap above 15 billion;
Owning these stocks through ADRs also enhances risk through currency movements. If the U.S. dollar goes up, the value of your foreign holding goes down. This has had an impact on many international funds for the last several years, as those that were unhedged against the dollar have substantially underperformed those funds that are hedged. Examine the chart of the WisdomTree International Hedged Quality Dividend Growth Fund versus the WisdomTree International High Dividend Fund. The hedged product has far outperformed its unhedged counterpart.
