The Norman Transcript

Business

June 1, 2014

Fund investors looking abroad for dividends

NEW YORK — In the search for dividends, it can pay for investors to head abroad.

Markets outside the United States have long been fertile ground for dividend hunters because their stronger cultures of paying dividends have resulted in higher yields. U.S. companies have boosted their own dividends and paid a record amount last year, but many mutual-fund managers say the most attractive dividend stocks are still outside the country. Investors also are showing a preference for foreign dividend payers: That’s where they’re putting more of their money.

“The U.S. is an actively hostile dividend market and has been for years,” says Daniel Peris, senior portfolio manager at Federated Investors. He helps run the Federated International Strategic Value Dividend fund (IVFAX), among others.

In the U.S., companies often use their cash to buy back stock instead of paying dividends. But in other developed markets, Peris says there’s a strong assumption that companies will pay out much or most of their earnings to shareholders as dividends.

Consider HSBC Holdings, the largest company by market value in the United Kingdom. The financial giant paid out 58 percent of its earnings per share last year in the form of dividends. In the U.S., companies in the Standard & Poor’s 500 index paid about 35 percent of their earnings as dividends. That’s more than they paid just a few years ago, but it’s down from earlier decades.

The yields are also higher abroad. U.K. stocks have an average dividend yield of 3.3 percent, and stocks in Europe outside the U.K. offer 3.1 percent, according to MSCI indexes. Stocks from emerging markets, such as Brazil and China, pay 2.7 percent. All are ahead of the 2 percent yield of U.S. stocks.

Interest in dividends has climbed after they helped to stem losses during the “lost decade” of 2000-09 for stocks. The S&P 500 fell 24.1 percent after the dot-com bust and financial crisis swamped markets in succession. But after including dividends, the decade’s loss was a less distasteful 9.1 percent. Besides potentially smoothing out the ride of stock investing, dividend payers can also supply income to investors contending with relatively low interest rates on bonds.

Text Only | Photo Reprints
Business
  • Tunneling your way through the Internet

    Surfing” the Internet used to be a popular pastime. You hopped on your computer surfboard and rode the waves of the Internet, randomly surfing and exploring from one website to the next....

    August 1, 2014

  • Ideal Homes to dedicate Oklahoma’s first Home for HOPE

    Ideal Homes dedicated the company’s first Home for HOPE on Wednesday at 13209 SW 5th in Yukon....

    July 27, 2014

  • Todd Lamb to keynote luncheon

    Lt. Gov. Todd Lamb will provide the keynote address at the Norman Chamber of Commerce’s annual Legislative Lunch at 11:45 a.m. Aug. 6 at the National Weather Center. Lamb will speak on state issues that may impact local business and ...

    July 27, 2014

  • Builders Association of South Central Oklahoma learns about storm water proposal

    The Builders Association of South Central Oklahoma invited Norman Public Works Director Shawn O’Leary to talk about the new storm water fee proposal at its luncheon Thursday....

    July 27, 2014

  • Backing up everything, everywhere, not as easy as it should be

    Though we may wish or believe otherwise, computing devices are still somewhat of a hassle to use. Some devices, like Apple’s iPad, come close to being fully realized machines, but even iPads have their clunky side....

    July 27, 2014

  • Is using E10 or ‘pure’ gasoline more economical?

    An analysis by AAA Oklahoma shows that at today’s prices, E10 motor fuel is cheaper to use than 100 percent gasoline, despite the fewer miles per gallon produced by E10, which is a blend of 10 percent ethanol and 90 percent gasoline....

    July 27, 2014

  • Appellate judge retiring

    The Honorable Charles A. Johnson retired from the Court of Criminal Appeals after 25 years on the bench. Johnson was appointed to the court on Oct. 31, 1989, by Gov. Henry Bellmon to fill the unexpired term of Hez J. Bussey. After 59 ...

    July 27, 2014

  • Candy Basket celebrates 25 years

    Perhaps it’s the chocolate covered blueberries whose deliciousness still lingers. Or maybe it’s the blood orange and wild honey white chocolate ganache that won’t soon be forgotten by your taste buds. At The Candy Basket there is decadence ...

    July 20, 2014

  • Bramlett & Associates adopts new name reflective of business

    Bramlett & Associates Multimedia LLC (Bramlett Multimedia), 215 W. Main St., announced this month that the company will change its name after 12 years in business and will do business as BOLD-Multimedia. The announcement, made first to ...

    July 20, 2014

  • Toothpick holders convention coming to Norman

    Lynne Ryan has been collecting toothpick holders her entire life. “My parents, Mr. and Mrs. W.L. ‘Bud’ Gibbs started our collection in 1936,” Ryan said. Ryan was born in 1940, and she grew up crawling around toothpick holders, as have ...

    July 20, 2014