"Most U.S. investors never look beyond domestic stocks for dividend income, and the reasoning, at least on the surface, seems logical. Given currency risk, unfamiliar names, differing accounting standards, and the perception that international markets are riskier and/or less transparent, this lack of consideration seems reasonable. However, as a result of this same consideration, this bias ultimately leaves money on the table, and while US dividend stocks infrequently reach 4-5% yields without serious risk, international markets offer established companies with sustainable business models"
"Another advantage of international stocks is diversification beyond the US economy. When domestic growth slows or the dollar weakens, international holdings can offset portfolio drag while still generating income. Three international names stand out right now for investors willing to look beyond US borders. Each offers yields that would be almost impossible to find in comparable US companies, backed by businesses that generate cash flow to sustain payouts without resorting to financial engineering."
U.S. investors frequently avoid international dividend stocks due to currency risk, unfamiliar names, differing accounting standards, and perceived lower transparency. That avoidance can forfeit higher income opportunities, since many established international companies offer yields around 6%, 7%, or 9% from infrastructure, commodity, and financial businesses with long operating histories. International holdings provide diversification that can offset U.S. economic slowdowns or dollar weakness while still generating income. International dividend investing requires additional research compared with U.S. blue chips, but the yield premium and diversification advantages can make the extra homework worthwhile. One cited example is Itau Unibanco, yielding 9.77%.
Read at 24/7 Wall St.
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