High Dividend Stocks From Emerging Markets

| June 1, 2015 | 0 Comments

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What countries are we looking at when we talk about emerging markets?

Well, right off the bat you’ve got China.

And countries like Thailand, Brazil, South Africa, and Poland.

Just a few years ago, Brazil, Russia, India and China were considered the top four emerging markets.

But Vladimir Putin’s antics, and deeply embedded corruption in Russia, have driven off a lot of investment.

India’s government can’t seem to get its act together, so over the past few years, a lot of money has pulled out.

And China is the land of 1.357 billion economic question marks.  (One question mark for every citizen.)

So where is the smart money right now?  If you’re looking for high dividend stocks from emerging markets, what countries should you be looking at?

Start with Taiwan.

High Dividend Stocks From Taiwan

What’s so great about Taiwan?

An entrepreneurial economy, strong exports, strong foreign reserves, low inflation, and private banking.

And technology.  Taiwan is home to the world’s second largest chip design industry.

For dividend investors who want a simple way to make money in Taiwan, there are 3 ETFs (Exchange Traded Funds) that focus on the country:

  • iShares MSCI Taiwan $EWT
  • Taiwan AlphaDEX Fund $FTW
  • MSCI Taiwan Quality Mix ETF $QTWN

Just keep in mind, none of these ETFs focus exclusively on dividend income.

And buying individual Taiwanese stocks isn’t easy.

You need to trade on the TWSE, Taiwan Stock Exchange.  I checked with the International Trading desk at Fidelity investments, which lets you trade on 25 different exchanges, and Taiwan’s TWSE isn’t one of them.

Check with your brokerage to see if they do.  And if you’re bound and determined to add a good dividend stock from Taiwan to your portfolio, here are three stocks to check out…

  • Novatek Microelectronics
  • Farglory Land Development
  • Highwealth Construction

So to keep life simple, and get the protection of diversification, it’s probably best to go with an ETF.

And you should definitely look beyond Taiwan.  There are plenty of other attractive emerging markets for dividend stock investors who want extra income.

Expand Your Emerging Market High Dividend Stocks Horizon

It’s no accident that Taiwan is the #1 emerging market for two of the top Emerging Markets ETFs.

Both the iShares Emerging Markets Dividend ETF $DVYE and the SPDR S&P Emerging Markets Dividend ETF $EDIV have chosen Taiwan for the top share of their investments.

The other emerging markets these ETFs are investing in…

Thailand, South Africa, Brazil, and Poland.

(Check with your broker to see where you can trade.  I know Fidelity lets you trade in South Africa and Poland.  You can do your trades in U.S. dollars.)

But here’s what you want to keep in mind when you invest in one of these emerging market ETFs.  Yields bounce around non-stop.

On September 5, 2014, the yield for the SPDR S&P Emerging Markets Dividend ETF $EDIV was 7.17%.  Today, it’s 0.87%.

On December 16, 2014, the yield for the iShares Emerging Markets Dividend ETF $DVYE was 7.48%.   Today, it’s 2.16%.

It’s the nature of the beast.  And a good reminder that you don’t want to go chasing high yield, because high yield stocks are home wreckers.

An Easy Way To Watch Emerging Markets

The MSCI Emerging Markets Index gives you a simple way to see how the world’s emerging markets are doing.

It tracks 21 markets… Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

(Keep in mind the MSCI is not just tracking dividend stocks, but broad market indices.  It’s not a pure dividend ETF.)

Lumped together, how have these markets been doing?

Check out this chart for a look at the iShares ETF, $EEM, that tracks the MSCI.

Dividend Stocks Emerging Markets Stock Chart $EEM

It’s interesting to see the MSCI has been trading in a fairly narrow range for the past three years.

Recently, we’ve seen emerging markets give up some of the gains from early 2015.

And here’s something we’ll run up against no matter when we look at emerging markets.

Volatility.  It’s inescapable.

So if you’d like to take advantage of emerging market growth, and pocket some dividend income without taking on too much emerging market risk, here’s what to do.

Cheer On The Home Team For High Dividend Stocks

Don’t overlook U.S.-based companies when you’re looking for high dividend stocks from emerging markets.

It’s easy for a dividend growth investor to find a good U.S. based company doing a lot of business in emerging markets.  This is where you can find a lot of the top dividend stocks.

For instance, not many people know that Apple $AAPL pulls in 40% of its revenues from emerging markets.

I just browsed through the Exxon Mobil $XOM annual report.  It devotes an entire section to global operations.  It’s doing business in all kinds of emerging markets.

So are companies like IBM $IBM, WalMart $WMT, Boeing $BA, and Dow Chemical $DOW.

And don’t forget the pharmaceutical stocks, which tend to pay dividends.  They focused on growing their business in emerging markets.

These are just some of the ways you can give your dividend stock income a boost.

And how you can steer clear of the risks that come with too much concentration in just one emerging market.


Michael Jennings

Note:  Michael Jennings writes and edits DividendStocksResearch.com.  Sign up for our free dividend reports and dividend newsletter at https://www.dividendstocksresearch.com/free-sign-up.  We’ll show you how to create regular income by investing in dividend stocks, easily, step-by-step.

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Category: Dividend Stocks

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Michael Jennings writes and edits DividendStocksResearch.com showing how you can profit from dividend stocks. His passion for stocks and especially Dividend Stocks began at an early age. Now he shares his knowledge and wisdom with anyone who asks... He shows beginning investors, retirees, and even trading pros how to create regular income by investing in dividend stocks, easily, step-by-step! You can Sign up for his free Dividend reports and dividend newsletter at http://www.dividendstocksresearch.com/free-sign-up

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