Investors yearning for yield have had a tough time of it. Bond yields have been suppressed for by an ongoing bond bubble, and low rates for many years have made high-yield stocks like utilities and REITs very expensive, or overvalued compared to the rest of the market.
That doesn’t mean investors can’t find high-yielding stocks at good value. They just have to look abroad, says legendary investor and author Jim O’Shaughnessy in the attached video.
O’Shaughnessy notes that over 60% of all global dividend-paying stocks are domiciled outside the U.S. Of these international stocks, they generally offer higher yields than their U.S. brethren. Not too mention the fact that global high-dividend stocks tend to outperform U.S.-based high-dividend payers.
Canadian Oil Sands (COSWF)
“[Canadian Oil Sands] has a 6.7% dividend yield, they’re relatively cheap, they’re a financially strong company with good earnings quality – those are the other things that we insist upon before we look to dividend yield,” O’Shaughnessy says.
More of the same with Vodafone, however it’s been a name that’s been beaten up in 2014. “Obviously what were looking for is very long-term attachments to these types of names, as long as they are dirt cheap, as long as they have good financial strength, good earnings quality, we’re very content to wait it out.”
Offshore oil services company Transocean is last on O’Shaughnessy’s list. “We run the screens that get us to the same place – cheap, financially strong companies, high dividend yields, historically it’s been a great way to invest,” he says.
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