The equity research team at UBS A.G. (NYSE: UBS) points out that with government bond yields running below expected rates of inflation for maturities of 10 years or less, investors can hardly be blamed for seeking out alternatives to the prospects of accepting negative “real” or inflation-adjusted U.S. government bond yields. A new report covering the UBS Dividend Ruler stocks offers a list of top foreign companies to buy. Investors should remember that foreign tax is often withheld on dividends from American depository receipts (ADRs).
AstraZeneca PLC (NYSE: AZN) kicks off the UBS list. Trading at a low 11.4 times earnings, the European drug giant is up more than 10% this year. The Thomson/First call price target for the stock is $48.91, below its current level. Investors are paid a 5.45% dividend.
Total S.A. (NYSE: TOT) operates in three segments in the energy industry: Upstream, Refining and Chemicals, and Marketing and Services. The consensus price target for the stock is $60. Investors receive a solid 5.50% dividend.
The Bank of Nova Scotia (NYSE: BNS) is a top Canadian bank to buy at UBS. The consensus price target for the stock is $67. Shareholders are paid a 4.10% dividend.
Pearson PLC (NYSE: PSO) is an international media and education company with its principal operations in the education, business information and consumer publishing markets. The consensus price target is at $20. Investors are paid a 5% dividend.
Unilever PLC (NYSE: UL), with its hundreds of products used every day, operates as a fast-moving consumer goods company in Asia, Africa, the Middle East, Turkey, Europe and the Americas. The consensus price objective for the stock is $45. Investors receive a 3.20% dividend.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) is a leading maker of generic and branded drugs. The consensus price target for the stock is $43. Shareholders are paid a 2.80% dividend.
The Toronto-Dominion Bank (NYSE: TD) is another major Canadian bank to make the UBS list. The consensus price target for the stock is $95.33. Investors are paid a 3.90% dividend.
Sanofi (NYSE: SNY) is another health care product provider that operates through Pharmaceuticals, Human Vaccines and Animal Health segments. The consensus price objective for the stock is $62.70. Shareholders are paid a 3% dividend.
In a world starved for yield, combining foreign dividend paying stocks with a portfolio of solid domestic names makes good sense. Not only are chances for solid total return enhanced, the mere fact that the names are not as correlated to domestic stocks is a positive as well.
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