24/7 Wall Street Insights

• American Depositary Receipts (ADR) are official US certificates representing shares in foreign companies that can trade as stocks in the US on American stock exchanges.
• While they may not be consistent in their total dividend amounts on an annual basis, several of them currently have extremely high yields at the time of this writing.
• ADR charges on dividends are currently 5 cents per share. 
• Passive income is simple- own quality dividends that pay you for doing nothing. Don’t miss out on our brand-new “7 Things I Demand in a Dividend Stock” report. It includes 2 A++ dividend stocks and how to spot future dividend winners that can put your returns on hyperdrive. To get it, click here. 

International stocks often can have upside potential opportunities that have no bearing or connection to events in the US. Some large foreign companies are majority owned by sovereign nations, which have commensurate advantages, along with national clout behind them. As a result, some of these companies currently are offering ultra-high double digit yields, based on market prices at the time of this writing. 

ADR

Rather than attempt to navigate through time zone and currency differences to access foreign stock exchanges, American Depositary Receipts. Bearing official US certificates that represent the foreign shares for trading on American stock exchanges, they can be obtained just like US stocks from the NYSE, NASDAQ, or OTC markets. 

24/7 Wall Street has a colossal database of dividend stocks that have showcased numerous examples of different portfolios to suit a wide range of investor criteria. With the ADR surcharge on dividends a very affordable 5 cents per share, the following ADRs listed below can deliver $1,500 in passive income dividends on a $5,200 total investment, equating to a cumulative average 29% APY. 

Avance Gas Holding Ltd.

Stock: Avance Gas Holding Ltd. (OTC: AVACF)

Yield: 53.36%

Shares for $1,300: 131.8

Annual Dividend Amount: $693.68

Eschewing the oil side of the energy business, Hamilton, Bermuda based Avance Gas Holding, Ltd. engages solely in Liquified Petroleum Gas (LPG). Avance Gas transports LPG from the Persian Gulf and the United States Gulf/the United States East Coast to destinations in Europe, South America, India, and Asia.

In August, the company announced a sale of its 12 vessel Very Large Gas Carrier (VLGC) fleet for US$1.05 billion to BW LPG. After the closing of this transaction, which will finalize in December, Avance Gas will then be the owner of four medium sized gas carriers (MGC) capable of carrying full ammonia cargoes, a 12.77% shareholding in BW LPG, as well as a substantial cash holding.

Including an earlier sale for 4 other vessels, Avance Gas will have sold a total of 16 VLGC vessels for a net $435 profit, which accounts for the large dividend payouts. By leasing other vessels for transport operations, the company has the warchest to take advantage of other opportunities while continuing to serve the LPG industry’s distribution requirements.

The transactions and delivery of ships to BW LPG are scheduled to take place in the window September 15 to December 31, 2024, which allows Avance Gas to trade the ships for some further period in the winter market. After bank financing reimbursement, the company’s net gain is estimated at $335 million

The previous Q1 2024 VLGC sales to other parties included the Avance Castor and Avance Pollux, both newbuilds, netted Avance Gas close to $100 million after repayment of bank financing. 

Ecopetrol, S.A.

Stock: Ecopetrol, S.A. (NYSE: EC)

Yield: 32.17%

Shares for $1,300: 148

Annual Dividend Amount: $418.21

Ecopetrol is located in Bogotá and has operations in Colombia, the US, Asia, Europe, South America, Central America, and the Caribbean. As the national oil company of Colombia, it engages in oil and gas exploration. Additionally, Ecopetrol transports, refines, and sells crude oil, refined fuels, petrochemical distillates, polypropylene resins and compounds, and natural gas. The company also is involved with power transmission and information technology. 

Ecopetrol continues to expand its businesses and develop its reserves. As of late February, 2024, the company announced the discovery of two new separate reservoir deepwater natural gas deposits. 

As Ecopetrol is 85% owned by the Colombian government, it is subject to more political policies than private entities. Under former president Ivan Duque, Ecopetrol moved into the Permian Basin to gain experience related to fracking. In 2019, the company established a joint venture in the Midland Basin with Occidental Petroleum. 

Colombia’s energy resources and energy security issues are now subject to the administration of President Gustavo Petro and his priority of favoring green energies. He is staunchly against fracking and  even importing gas from the U.S. that comes from the drilling process, despite Colombia’s vast shale oil resources.  As a result, Ecopetrol was forced to back away from a $3.6 billion deal with Occidental for a stake in the latter’s CrownRock LP. 

Nevertheless, Ecopetrol has raised its dividend every year since 2020 for a total +38.8% increase. 

TORM plc

Stock: TORM plc (NYSE: TRMD)

Yield: 17.35%

Shares for $1,300: 37.7

Annual Dividend Amount: $225.55

Another example of energy sector specialization in the shipping industry is 135 year old UK shipping company TORM plc. Headquartered in London and founded in 1889, TOMR transports refined petroleum products, such as gasoline, jet fuel and naphtha, as well as fuel oil. 

TORM plc’s 90 vessel strong fleet primarily ranges between 45,000 and 114,000 DWT (Dead Weight Tons), which classifies them in the LR1 (Long Range 1: 55,000-79,999 DWT) and LR2 (Long Range 2: 80,000-159,999 DWT) categories. 

Analysts also believe TORM plc is undervalued. The company’s current assets are  roughly 3.5x above its current liabilities, indicating strong liquidity,  the ability to meet short-term obligations, and to pay the hefty 17.35% dividend.  TORM plc is trading at 4.95 times this year’s earnings estimate, a 57% discount to the energy shipping industry, and significantly lower than its sector rivals.

Petróleo Brasileiro S.A. – Petrobras

Stock: Petróleo Brasileiro S.A. – Petrobras (NYSE: PBR)

Yield: 12.74%

Shares for $1,300: 87.6

Annual Dividend Amount: $165.62

The surge of international support for BRICS (Brazil, Russia, India, China, South Africa) and its emphasis on asset-backed, sound currency is resonating among the over 40 nations that have requested membership admission. 

Based in Rio de Janeiro, Brazil, Petróleo Brasileiro S.A. – better known as Petrobras, is the national oil company of Brazil. As such, its energy commodities are of national importance for Brazil’s real. 

The company has three broad divisions: 

• Exploration and Production of oil and natural gas.
• Refining, Transportation, and Marketing, which handles sales of crude oil and refined products, such as ethanol.
• Gas and Power, which involves Liquid Natural Gas (LNG) logistics and trading, along with thermoelectric power generation.

An announcement earlier this year that Petrobras was considering buying back the Mataripe refinery in northern Brazil from Abu Dhabi owned Mubadala Capital’s Acelen subsidiary gave investors cause to cheer, as it reinforced the bullish prospects of numerous analysts. Other growth oriented and major deal announcements include:

• A potential acquisition of a 40% stake in the Namibian Mopane oil and gas exploration block from Portugal’s Galp Energia, SGPS, S.A.
• A recent $1 billion drillship contracts arrangements with Constellation Oil in September.
• Two offshore subsea contracts awarded to TechnipFMC of the UK.
• Completion of a $1 billion bond offering that was 3.2x oversubscribed, indicating market support and confidence in new CEO Magda Chambriard, who replaced Jean Paul Rates in June after the latter was fired by President Lula da Silva.

Name	Yield	Annual Dividend Amount
Avance Gas Holding Ltd. (OTC: AVACF)	53.36%	$693.68
Ecopetrol, S.A. (NYSE: EC)	32.17%	$418.21
TORM plc (NYSE: TRMD)	17.35%	$225.55
Petróleo Brasileiro S.A. – Petrobras (NYSE: PBR)	12.74%	$165.62
Total Annual Dividend		$1,503.06

 

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