In this article, we discuss 12 best foreign dividend stocks to invest in. You can skip our detailed analysis of the performance of dividend stocks over the years, and go directly to read 5 Best Foreign Dividend Stocks To Invest In.
Investors have consistently shown a preference for dividend stocks, whether they originate from American or international companies. The primary objective of investing in these stocks is to generate a steady income, making it a top priority for investors. Dividends can serve as indicators of a company's financial strength. Over time, companies that have initiated or raised their dividends have tended to outperform those that have reduced or eliminated dividend payments. As per findings from Franklin Templeton, companies in the S&P 500 that consistently increased or initiated dividends experienced a positive return of 8.58% over the 30-year period ending in December 2022. In contrast, those that reduced dividends showed a negative return of 2.64%. Additionally, stocks that did not pay any dividends provided a 3.25% return during the same timeframe.
These returns extend beyond solely U.S. stocks; global companies that consistently increase dividends have also demonstrated robust performance over time. There is significant evidence from various equity markets indicating that investment strategies focused on dividends tend to outperform the broader market in the long term. Abrdn referenced data from Factset and disclosed that over the last two decades, companies in the MSCI All Country World Index, that initiated or consistently increased their dividends, yielded a return of 10.68%. In contrast, companies that cut or eliminated dividends experienced a negative return of 2.70%. The report highlighted that within the realm of global equities, the annual return volatility of Dividend Growers and Initiators is notably lower than that of Non-Dividend Payers and Dividend Cutters & Eliminators. Moreover, in comparison to the broader global equities represented by the MSCI ACWI Index, the return volatility of Dividend Growers & Initiators has also been lower, contributing to more favorable risk-adjusted returns.
During periods characterized by elevated inflation and surging interest rates, investors place a higher value on high yields. The prospect of earning additional percentage points on returns becomes particularly appealing. According to a report by Morningstar, as of May 2023, the markets with the highest yields include Norway, Hungary, Romania, and Iceland. On average, Norwegian stocks that provide dividends are anticipated to yield an impressive 17.83%, making them particularly attractive to investors seeking robust returns in such economic conditions.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV) are some of the most prominent US dividend stocks. However, in this article, we will take a look at some of the best foreign dividend stocks to invest in.
12 Best Foreign Dividend Stocks To Invest In
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Our Methodology:
For this list, we initially used a stock screener to identify foreign (non-U.S.) stocks that are traded on US stock exchanges. Subsequently, from this dataset, we selected 12 stocks that boasted the highest number of hedge fund investors from Insider Monkey’s database of Q3 2023. The stocks presented in the article were then arranged in ascending order based on the count of hedge fund investors. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
Royal Bank of Canada (NYSE:RY) is one of the largest and most prominent banks in Canada, and it is also a major player in the global financial industry. In November 2023, the company declared a 2% hike in its quarterly dividend to C$1.38 per share. It has raised its dividends every year since 2012, which makes RY one of the best foreign dividend stocks to invest in. The stock has a dividend yield of 4.16%, as of January 26.
RY can be added to dividend portfolios alongside popular US dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV).
At the end of Q3 2023, 19 hedge funds tracked by Insider Monkey reported having stakes in Royal Bank of Canada (NYSE:RY), down slightly from 20 in the previous quarter. The consolidated value of these stakes is over $193.6 million. Among these hedge funds, Israel Englander's Millennium Management was the largest stakeholder of the company in Q3.
Unilever PLC (NYSE:UL) is a London-based multinational consumer goods company with a broad portfolio of products in various categories. In November 2023, the company declared a quarterly dividend of $0.453 per share, which was consistent with its previous dividend. With a dividend yield of 3.94% as of January 26, UL is one of the best foreign dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in Unilever PLC (NYSE:UL) grew to 21 in Q3 2023, from 19 in the previous quarter. The collective value of these investments is over $628 million.
Artisan Partners mentioned Unilever PLC (NYSE:UL) in its Q2 2023 investor letter. Here is what the firm has to say:
“We made two significant purchases during the quarter: Unilever PLC (NYSE:UL) and Bayer AG. Both companies have been owned in prior years. And the share price of both companies became more attractive at least partially due to the stock market’s recent focus on technology stocks.
Novartis AG (NYSE:NVS) is a multinational pharmaceutical and healthcare company headquartered in Switzerland. It is one of the largest pharmaceutical companies in the world, and it operates in various segments of the healthcare industry. The company currently offers an annual dividend of CHF 3.20 per share, having raised it by 3.2% in February. This was the company's 26th consecutive year of dividend growth, which places NVS on our list of the best foreign dividend stocks. As of January 26, the stock offers a dividend yield of 3.27%.
As of the close of Q3 2023, 26 hedge funds tracked by Insider Monkey reported having stakes in Novartis AG (NYSE:NVS), which remained unchanged from the previous quarter. The total value of these stakes is more than $468 million.
Sanofi (NASDAQ:SNY) is a Paris-based multinational pharmaceutical company that is primarily focused on the research, development, manufacturing, and marketing of pharmaceutical products. The company offers an annual dividend of €3.56 per share and has a dividend yield of 3.81%, as of January 26. With a dividend growth streak of 29 years under its belt, SNY is one of the best foreign dividend stocks on our list.
Of the 910 hedge funds tracked by Insider Monkey at the end of Q3 2023, 29 funds owned stakes in Sanofi (NASDAQ:SNY), compared with 30 in the preceding quarter. The collective value of these stakes is $1.18 billion. With roughly 15 million shares, Fisher Asset Management was the company's leading stakeholder in Q3.
BP plc (NYSE:BP) is a British multinational oil and gas company with operations across the entire energy spectrum. It provides a dividend of $0.4362 per American Depositary Share (ADS), equating to a dividend yield of 4.86, as of January 10. The company has been paying regular dividends to shareholders since 1998, which makes BP one of the best foreign dividend stocks on our list. The stock's dividend yield on January 26 came in at 4.82%.
At the end of September 2023, 35 hedge funds owned investments in BP plc (NYSE:BP), down from 36 in the previous quarter, as per Insider Monkey's database. These stakes are worth over $2.05 billion in total.
Barrick Gold Corp (NYSE:GOLD) ranks seventh on our list of the best foreign dividend stocks. The leading international gold mining company is headquartered in Toronto, Canada, and has a significant presence in the global mining industry. The company is primarily engaged in the exploration, development, and operation of gold mines. It currently pays a quarterly dividend of $0.10 per share and has a dividend yield of 2.58%, as of January 26.
As of the end of Q3 2023, 36 hedge funds in Insider Monkey's database reported having stakes in Barrick Gold Corp (NYSE:GOLD), growing from 32 in the previous quarter. The collective value of these stakes is over $454.4 million. First Eagle Investment Management was the company's leading stakeholder in Q3, owning over 42 million shares.
LyondellBasell Industries NV (NYSE:LYB) is a multinational chemical industry company, based in the Netherlands. The company operates in the manufacturing and refining of petrochemicals, polymers, and other chemical products. LYB is one of the best foreign dividend stocks on our list as the company maintains a 13-year track record of consistent dividend growth. As of January 26, the stock has a dividend yield of 5.24%.
In addition to popular dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV), LYB van also offer reliable investment options for investors.
The number of hedge funds tracked by Insider Monkey owning stakes in LyondellBasell Industries NV (NYSE:LYB) stood at 36 in Q3 2023, which remained unchanged from the previous quarter. The consolidated value of these stakes is over $687.2 million.
