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5 High-Yield Stocks You May Be Ignoring
live (public) 0.26% August 12
We have recently noted that high yield stocks may hide a fundamental weakness and "All that glitters may not be gold," S&P Capital IQ stating that 20 eurozone companies trading on major U.S. exchanges are now yielding over 5%. Illan filters this further with reasonably stable businesses, that can afford to meet their short-term interest obligations (in case credit gets more expensive), and that earn their revenue from a diversified geographic base.
Those with the strength to survive may actually benefit from a weaker Euro. He selects five from this list.
|
Company |
Country |
Euro Exports as % of Revenue* |
Interest Coverage |
Dividend Yield |
|---|---|---|---|---|
| Telefonica (NYSE: TEF) | Spain | 43% | 4.8 | 10.9% |
| France Telecom (NYSE: FTE) | France | 30%** | 3.7 | 11% |
| Nokia (NYSE: NOK) | Finland | 66% | 9.0 | 8.1% |
| Total (NYSE: TOT) | France | 31% | 35.1 | 6.1% |
| Veolia (NYSE: VE) | France | 27% | 2.0 | 12.9% |
Source: S&P Capital IQ. *As of fiscal 2010. **Approximation.
- Telefonica provides fixed telecommunications, mobile, and Internet services to Spain, Europe, and Latin America. Having access to Latin America is key as this is a rapidly growing market and provides diversification.
- France Telecom doesn't have Latin America but Africa and
the Middle East are significant growth areas.
- Nokia is one of the troubled cell phone operators that has not
made the jump into the smart phone leadership. This is a cheap stock
with upside but still a major world player.
- Total is a massive integrated oil and gas company -- about the size of ConocoPhillips
- Veolia provides water, environmental, and energy-grid services worldwide
So, we have five strong companies with good yields but are in the troubled Eurozone. What would a portfolio look like and how would it compare with our reference benchmark?
| Asset | Fund in this portfolio | Price change* | Percentage |
|---|---|---|---|
| Asset1 | TEF (Telefonica SA ADR) | 0.40% | 15.65% |
| Asset1 | NOK (Nokia Corp ADR) | 0.0% | 15.61% |
| Asset1 | TOT (Total SA ADR) | 0.60% | 32.89% |
| CASH | CASH (CASH) | 0.0% | 35.85% |
* Day change on 08/12/2021.
Previous
Since 08/05/2005
| Name | YTD* Return |
1Yr AR** |
3Yr AR** |
5Yr AR** |
10Yr AR** |
15Yr AR** |
|---|---|---|---|---|---|---|
| 5 High-Yield Stocks You May Be Ignoring | 12.9% | 11.0% | -5.1% | -2.1% | -3.0% | -3.4% |
| VFINX (Vanguard (S&P 500) Index) | 7.9% | 27.1% | 8.5% | 13.5% | 12.5% | 14.6% |
| VBINX (Vanguard Balance (60% stocks/40% bonds) | 3.5% | 15.3% | 2.8% | 7.7% | 7.7% | 9.7% |
* YTD: Year to Date
** AR: Annualized Return
| Last 1 Week* | 1 Yr | 3 Yr | 5 Yr | 10 Yr | 15 Yr | Since 08/05/2005 |
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Annualized Return(%) | 0.8 | 11.0 | -5.1 | -2.1 | -3.0 | -3.4 | -2.6 | 12.9 | -15.3 | -6.2 | -1.9 | 4.3 | -5.4 | -11.8 | -8.4 | 25.1 | -8.2 | -24.9 | -11.9 | 10.8 | -43.0 | 44.5 | 34.4 | -0.1 |
| Sharpe Ratio | NA | 0.62 | -0.31 | -0.18 | -0.17 | NA | -0.14 | 0.81 | -0.58 | -0.73 | -0.25 | 0.37 | -0.31 | -0.72 | -0.54 | 1.36 | -0.3 | -0.7 | -0.42 | 0.34 | -0.98 | 2.04 | 1.98 | -0.08 |
| Draw Down(%) | NA | 16.5 | 40.0 | 42.1 | 53.9 | NA | 76.5 | 7.8 | 31.9 | 14.8 | 13.2 | 7.3 | 13.9 | 16.3 | 17.5 | 14.2 | 30.0 | 36.9 | 31.5 | 30.3 | 56.4 | 8.9 | 13.4 | 8.2 |
| Standard Deviation(%) | NA | 17.6 | 18.8 | 16.2 | 19.6 | NA | 23.7 | 15.9 | 26.8 | 10.5 | 13.1 | 10.0 | 17.9 | 16.3 | 15.7 | 18.5 | 27.5 | 35.4 | 28.3 | 31.7 | 45.0 | 20.3 | 15.7 | 13.6 |
| Treynor Ratio | NA | 0.24 | -0.11 | -0.05 | -0.04 | NA | -0.04 | 0.38 | -0.27 | -0.16 | -0.06 | 0.05 | -0.06 | -0.16 | -0.08 | 0.22 | -0.05 | -0.19 | -0.09 | 0.11 | -0.47 | 0.41 | 0.28 | -0.01 |
| Alpha | NA | -0.01 | -0.05 | -0.04 | -0.05 | NA | -0.04 | 0.04 | -0.1 | -0.08 | 0.0 | -0.03 | -0.05 | -0.05 | -0.08 | -0.03 | -0.1 | -0.1 | -0.11 | -0.04 | -0.03 | 0.14 | 0.06 | -0.02 |
| Beta | NA | 0.46 | 0.55 | 0.55 | 0.78 | NA | 0.91 | 0.34 | 0.58 | 0.49 | 0.51 | 0.68 | 0.98 | 0.73 | 1.04 | 1.17 | 1.55 | 1.32 | 1.32 | 1.02 | 0.94 | 1.02 | 1.13 | 0.89 |
| RSquared | NA | 0.15 | 0.46 | 0.43 | 0.46 | NA | 0.58 | 0.08 | 0.57 | 0.34 | 0.44 | 0.21 | 0.52 | 0.48 | 0.57 | 0.49 | 0.52 | 0.77 | 0.71 | 0.77 | 0.72 | 0.64 | 0.52 | 0.43 |
| Sortino Ratio | NA | 0.94 | -0.41 | -0.24 | -0.24 | NA | -0.19 | 1.17 | -0.76 | -0.92 | -0.33 | 0.53 | -0.4 | -0.98 | -0.72 | 1.93 | -0.42 | -0.91 | -0.59 | 0.46 | -1.32 | 3.07 | 3.09 | -0.11 |
| Yield(%) | N/A | 2.18 | 0.96 | 0.83 | 1.48 | N/A | 2.44 | 0.81 | 1.26 | 0.45 | 0.4 | 0.62 | 0.46 | 0.01 | 0.0 | 2.05 | 4.99 | 7.65 | 4.17 | 5.53 | 3.51 | 3.45 | 3.49 | 0.14 |
| Dividend Growth(%) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
*: NOT annualized;YTD: Year to Date
**Inception: starting from 08/05/2005
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