Dividend Watch: Big Dividends in ADRs (AZN, GSK, NOK, TMX)

Investing

Published: April 14, 2011 11:38 am

Last Updated: April 27, 2020 8:18 pm

American Depository Receipts, or ADRs, are generally called American Depository Shares, or ADSs, now. We found after some routine screens that there were many 3%, 4%, and 5% or higher dividend yields available for investors. The big caveat is that these dividends all have to be considered ‘moving targets’ because they fluctuate in dollar terms as their underlying currencies change levels. We used the most recent payouts and analyzed past trends on an annualized basis for the implied yields. We identified four such dividends for our “Daily Dividend” and have the screen on for more tomorrow:

Astrazeneca PLC (NYSE: AZN) pays twice a year and we had to split the past two dividends as a result. At $49.02, the drug giant’s implied yield is close to 5.2% and these ADRs have traded in a range of $40.30 to $53.53 in the last 52-weeks.

GlaxoSmithKline PLC (NYSE: GSK) is one that has to be interpolated and applied to last year and expectations, but at $40.80 with a 52-week trading range of $32.15 to $42.10 per ADR, this drug giant has a yield that would be close to 5.1%.

Nokia Corporation (NYSE: NOK) pays only an annual yield and it has proposed a 0.40 euro per share dividend for its annual meeting next month in May. This gives the currency risk even more room for error, but if we just keep it static then the payout would come to close to 6.4% since its $8.66 ADR price is so low against a 52-week range of $7.73 to $15.47. Maybe this is the only good thing happening at Nokia.

Telefonos de Mexico SA de CV (NYSE: TMX) at $18.38 pays close to a 6% yield and ADRs have traded in a range of $13.00 to $18.94 in the last 52-weeks. The Mexican telecom operator is one of the highest yields in Latin America.

Again, ADRs pay dividends based upon the local accounting standards. Not all are quarterly and the currency fluctuations and the timing can vary greatly here. There is no free lunch, but you already know that. As always, know what you are investing in.

JON C. OGG

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