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3 Emerging Market High Dividend Stocks


With the sovereign debt problem in Europe, slowing growth in China and the U.S., investors need some kind of protection in their portfolios. Dividends have proven to be a strong source of protection against capital loss, as investors are more likely to flow to names that have strong dividend yields then those with higher growth potential in a recession.

Having companies in emerging markets is also beneficial, as these countries are still growing, albeit less then they were previously. Investors want as much growth in their portfolios as possible, and if the stocks offer solid dividend yields, that is the icing on the cake.

Here are three emerging market names that currently yield more than 5%.

Banco Santander, S.A. (NYSE: STD) yields 7.8%, and has a market cap of $47 billion. There have been rumors that Spanish banks have large amounts of PIIGS (Portugal, Spain, Ireland, Italy, Greece) debt, but Santander is the largest bank in Spain, and is unlikely to fail. A few years ago, Santander purchased Sovereign bank in the U.S. to help diversify away from European exposure, and give it a more stable deposit base. Sovereign recently went out and purchased a $200 million credit card portfolio. While valuations could get cheaper should Spainís financial situation get worse, Santander is one of the strongest Spanish banks. It trades at less than half of book value, the measure most banks are priced off of.

BT Group plc (NYSE: BT) is another foreign company yielding a hefty amount. Currently yielding 5.9%, BT Group provides communications solutions and services worldwide. The company is worth just over $20 billion, and the company trades at a more than reasonable 6.5 times 2012 earnings. The company has paid out dividends since 2002, and despite the sharp price drop seen in early August, shares have performed relatively well year-to-date. Excluding the dividends paid out, shares are down 8% year-to-date, thanks mostly in part to the collapse in August.

The last name to consider is Companhia Energetica Minas Gerais (NYSE: CIG). Companhia Energetica Minas Gerais yields 6.3%, and the $11.5 billion company is a play on the growing Brazilian economy. It is a utility company that generates the majority of its sales in Minas Gerais, Brazil, and as Brazilís middle class continues to demand more from life, CIG should see strong demand for its electricity. It will only get stronger in the years to come, as Brazil hosts the 2014 World Cup and 2016 Olympics.

There are many more emerging market stocks yielding over 5%, but this list provides you with a few ideas.

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.


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