Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Total SA (ADR) (TOT), Seadrill Ltd (SDRL): Big Dividends? Check. International Exposure? Check.

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some international dividend-paying stocks to your portfolio but don’t have the time or expertise to hand-pick a few, the iShares Dow Jones International Select Div ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF’s expense ratio — its annual fee — is a relatively low 0.50% — and it recently yielded more than 5%!

This ETF has performed  well, outstripping the MSCI EAFE index over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why international companies?
It’s a smart idea to diversify your holdings not only by market size and industry but also geographically. If the U.S. economy stalls or slides, other economies may still be performing well and could help offset losses in your portfolio. Dividend-paying companies offer an extra bonus, as dividends can be quite powerful. Internationally reaped ones can be a little more complicated than domestic ones, though.

More than a handful of international dividend payers had strong performances over the past year. France-based oil giant Total SA (ADR) (NYSE:TOT). jumped 23%, and yields 4.3%. It’s ambitious, taking on some riskier projects such as offshore Nigerian fields as well as shale drilling in Europe. Like its peers, though, Total SA (ADR) (NYSE:TOT) is facing rising costs and shrinking margins.

Seadrill Ltd (NYSE:SDRL)

Seadrill Ltd (NYSE:SDRL) gained 21% and yields about 8.4%. The deepwater drilling specialist has been executing well and dominating its realm, in part via aggressive financing and high debt. Still, its backlog was recently $19 billion, and one of its subsidiaries has snagged a $2.7 billion eight-year contract with Brazil. Seadrill Ltd (NYSE:SDRL)’s fleet is more modern than those of its peers, and it’s also expanding its fleet. Bears don’t like it paying out more than it earns, in dividends, worrying about dividend sustainability.

Italy-based oil giant Eni SpA (ADR) (NYSE:E) advanced 12% and yields 5.3%. The company suffered serious disruption by political unrest in Libya a few years ago, and is now facing unrest in Egypt, as are Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and others. Eni SpA (ADR) (NYSE:E) is active in Syria as well. ENI sports double-digit revenue and earnings growth, with revenue growth accelerating in recent years. It has been moving into natural gas in recent years.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.