In the pharmaceutical industry, GSK ranks as one of the largest firms by total sales. The company wields its might across several therapeutic classes, including respiratory, cancer, antiviral, and vaccines. GSK uses joint ventures to gain additional scale in certain markets like HIV.

In the pharmaceutical industry, GSK ranks as one of the largest firms by total sales. The company wields its might across several therapeutic classes, including respiratory, cancer, antiviral, and vaccines. GSK uses joint ventures to gain additional scale in certain markets like HIV.

Global stocks are gaining, if not at the pace of domestic equities. While the S&P 500 has risen 17% year to date, the EAFA index of large- and mid-cap stocks based in countries other than the U.S. and Canada has gained 9.5%. Over the past five years, the performance gap has been wider, with the S&P 500 advancing 94% compared to a 32% gain in EAFE. But the underperformance has given global stocks a valuation advantage, particularly in the area of dividends. Consider that the EAFE dividend yield of 2.9% is 170 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors, who have endured recent wide swings in prices for rate-sensitive equity in areas such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S. interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection of companies that pay dividends, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term BUY rating from an Argus analyst. Note this list of approximately 25-30 companies offers exposure to eight of the 11 major industrial sectors. The list includes companies from 10 countries.

The benchmark U.S. 10-year Treasury bond yield is back below 4.0%, down sharply from an enticing 4.7% less than six months ago. Sovereign rates around the world generally have headed in the same direction, with the UK's benchmark yield also in the 3.9% range, Germany at 2.2%, and Switzerland down to 0.4%. Japan is an outlier, as its central bank recently raised its key interest rate for the first time in over a decade, roiling financial markets. We doubt that move will be replicated by other nations, as global economic growth is expected to cool this year to 3.2% from 3.3% a year ago. And even with the hike, Japan's benchmark bond yield is still below 1.0%. Elsewhere, political uncertainty in South Africa and Brazil are keeping those sovereign debt interest rates near 10%. Russian debt yields are close to 15%, up 300 basis points from a year ago, as the conflict with Ukraine drags on and inflation runs at a 9% rate. Looking ahead, the recent decline in U.S. Treasuries is forecasting a series of upcoming short-term rate cuts by the Fed. If that's the case, and form holds, long-term U.S. Treasury yields may stay in the 3.5%-4.0% range as the domestic economy continues to grow. That's not a bad return, with inflation rates subsiding. From a portfolio perspective, we would avoid over-weighting foreign-government fixed-income securities at this time, given their volatile yields, sovereign risks, and repatriation issues.