What makes this set of companies even better is that they represent three totally different countries. That’s right; you’re getting a high yielding international portfolio. Representing Russia we have VimpelCom Ltd (ADR) (NYSE:VIP). In the Dutch corner we have Royal Dutch Shell plc (ADR) (NYSE:RDS.B), and to round things off, Lorillard Inc. (NYSE:LO) will be representing the United States.
Tobacco
Yes, a tobacco company made it into this article, and that company is Lorillard Inc. (NYSE:LO). Lorillard Inc. (NYSE:LO) is the company behind the brands Newport, Maverick, Kent, and Old Gold. It made it into my shortlist with a solid 5.10% dividend yield.
One of the things that is really great about Lorillard Inc. (NYSE:LO) is its solid 18% net profit margin. The company has managed to keep it around about that 18% mark for the last five years, and it definitely gives us something solid to go on over the next few years.
Now to the future, will it continue growing? Well, according to the analysts that cover the stock, it should stay hand-in-hand with the S&P 500. If we’re able to hold this stock, grow 10% per year, and collect a 5.10% dividend, I think we’d be doing quite well for ourselves.
Moving forward in tobacco is a rough game to play. We’re obviously going to see legislation kick into upper gear, and perhaps less smokers out there. This hasn’t stopped tobacco companies from soaring thus far though. Lorillard Inc. (NYSE:LO) has continued to see sales growth over the past decade, and I don’t believe that the growth will stop any time soon.
Energy
It’s very likely that you have filled up with a tank of gas from the local Shell station. Those stations are part of the multinational oil and gas company, Royal Dutch Shell plc (ADR) (NYSE:RDS.B).
At the close of 2012, the company had revenue of $467 billion. To put that into some sort of scale, the Netherlands actually had a GDP in 2012 of $770 billion. Quite evidently, this company means a lot to the country.
This company could also mean a lot to your portfolio. The stock pays a dividend that yields 5% and a market cap that’s larger than a lot of nations’ GDP.
The growth of this company is not expected to be much over the next couple of years; analysts have it at just 1.5% per year. While that is on the low end, it’s also positive. It’s positive, and you’re getting a piece of one of the world’s largest companies in the process. You’re also collecting one of the largest, most stable dividends available, and that’s why it remains on my list.
As the world population grows, so does the dependence on oil, and Royal Dutch Shell plc (ADR) (NYSE:RDS.B) is perfectly positioned for that. The company is close to generating $500 billion per year in sales, and with future growth I know that it will get there.
Royal Dutch Shell plc (ADR) (NYSE:RDS.B) is also focused on generating the energy of the future to ensure its relevance in a post-oil world. Their collection of patents and established places of doing business will be enough to keep this company going, even after oil has dried up (theoretically speaking).
Communications
This Russia-based communications company probably doesn’t show up on many investors’ radars. The company actually owns the third-largest wireless network in Russia and is the second largest land-line operator in the nation, too.
While providing these services, the company also manages to pay out an impressive dividend that yields 8.50%.
What really appealed to me about this company the most was some of their expected growth. Analysts believe that the company will grow earnings by around 18% this year, and a further 33% next year. That’s vastly outperforming what analysts believe the S&P 500 will do.
Another thing that’s great is that this company is trading at just 8.4 times earnings while the S&P as a whole is soaring much higher. The company also comes at quite a low price-to-book value of just 1.23. With the growth that’s supposed to be coming, you’ll be able to bridge that gap in no time.
When it comes down to it, we’re buying this stock simply for the yield. There is no doubt that communications in Russia will grow over the next couple of years, but gains in the stock may end up following the overall market much like Verizon does.
Investor takeaway
All three of these companies operate in different segments, and in different countries. They also pay outstanding dividends that should be able to bolster anyone’s cash balance.
I would consider buying all three of these companies, they could even be considered a nice starter portfolio for anyone who is wanting to get going with a dividend portfolio.
The article An International Big Yielding Portfolio originally appeared on Fool.com and is written by Ash Anderson.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
