Here's where the highest yields are hiding
If you aren't looking beyond US borders, then you're missing out on some of the world's most productive securities.
I think it's one of the market's biggest missed opportunities. Every day, millions of U.S. investors are missing out on the world's highest-yielding securities.
That's because the vast majority of the world's highest-yields aren't found in the United States.
As the chief strategist of High-Yield International, my job is to scour the globe for the world's highest yielding stocks, funds and ETFs. And at last count, my research shows that over 79% of the world's highest-yielding stocks are based in international markets. (You can read more of my research about these stocks here.)
That includes companies like global shipping giant Navios Maritime Partners (NMM), which yields 9.3%. And Bermuda-based outfits like SeaDrill (SDRL), which pays an impressive 7.9%. If you're like most people, then you'll probably never take advantage of foreign stocks like these.
That's a shame, because the average stock in the United Kingdom yields 3.8%. Brazil's average yield is 4.4%, Australia yields 4.3% and New Zealand pays 4.5%.
By contrast, stocks here at home yield a paltry 2%, on average.
Most U.S. investors dismiss the idea of investing abroad. They tend to think other countries are "riskier" than the United States.
But that's not always the case, especially with one special country I'll tell you about in a moment, where average yields are double those found in the United States.
A safer way to invest
In the past couple of years, America's total debt load has topped $17 trillion -- and that burden is projected to grow even larger, reaching a total of $25 trillion by 2020.
Like a taxi meter spinning faster and faster, we are slipping $1.9 billion deeper into the hole every day -- at a rate of $80 million per hour.
Our credit rating was even knocked down from its golden "AAA" status by Standard & Poor's.
Now compare that to a country like Australia. From the mid 1990s through 2007, the Australian government steadily paid down its debts, reducing the nation's debt-to-GDP ratio to less than 10%.
Although Australia took steps to help stimulate its economy amid the financial crisis, the government kept spending under control. As a result, Australia's public debt-to-GDP ratio is still just 29% -- several times lower than the United States' debt ratio.
But what's more, amid all the pain caused by the Great Recession, Australia has truly lived up to its nickname the "Lucky Country," avoiding recession entirely and emerging from the global downturn largely unscathed.
Throughout the entire economic slowdown, Australia's GDP only experienced a single quarter of negative economic growth, and that was at the height of the financial crisis in 2009. The country's growth quickly re-accelerated to a 3% clip in 2010.
That's part of the reason Australia is one of only eight countries that still sports a perfect "AAA" credit rating by all the major ratings agencies.
Yields that are 2X higher than U.S. stocks
But Australia is much more than just a safe place for your money. The country also offers some of the highest yields on the planet.
The average dividend yield of all stocks on the Australian Stock Exchange stands at 4.3%, more than double the 2% average yield offered by stocks in the S&P 500.
Take Telstra (TLSYY), Australia's equivalent to AT&T (T). The telecom offers phone and Internet service around the country.
You'd expect a telecom to pay a substantial dividend. AT&T pays a yield of 5.2%, making it one of the S&P's highest-yielding stocks.
But Telstra pays a yield of roughly 5.8%.
It's the same story with APA Group (APAJF). This company is the largest natural gas infrastructure firm in Australia, owning more than 10,000 kilometers of natural gas pipelines, two major natural gas storage facilities and two power plants.
If that business sounds familiar, it's basically the same as a master-limited partnership (MLP) here in the United States. MLPs are known for their high-yields. The largest U.S.-based MLP, Enterprise Products Partners (EPD), yields 4.2%.
APA Group? It pays more than 6.6%, working in basically the same business.
But Australia is by no means the only country that offers fat dividend yields like these. The fact of the matter is there is simply a much stronger dividend culture abroad. Individual investors play a larger role in those markets, and they have always demanded more dividends.
Don't get me wrong, I don't recommend putting your entire portfolio into international high-yielders. But I think most U.S. investors are unaware of what they're missing. Put simply, if you want to earn the most income possible, then you have to start considering international income stocks.
StreetAuthority LLC owns shares of EPD, T, NMM, SDRL in one or more of its "real money" portfolios.
More from StreetAuthority
- Is China's Miracle Coming To An End?
- Expect Another Blockbuster Year For IPOs In 2014
- Why You're Not Hearing About 79% of the World's Highest-Yielding Stocks...
NMM was DOWN 54% in 2008-2009 and SDRL is DOWN 14% in the last 2 months. with that said, most mainstream advisors would have their growth portfolio clients about 25-33 % in international stocks with about 4-8% of that in emerging markets. so this is news how?
You mean that you aren't investing all of your Obama dollars back into Obamaville?
IQ-68.....You really don't read well or comprehend do you ??
Or is it just the articles that fit your agenda or rants..?
Seems to me there is "more overall" Obama bashing on this Site then anywhere else I go for news.
Try reading "all the comments", then maybe ye shall have an awakening.
I always get skeptical, of anything Headquartered in the Caribbean .
A couple of times, was enough for us.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
4 analysts downgrade the stock the day after a disappointing quarterly report.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.