Divi-licious!
How world’s highest restaurant and other foreign firms could boost YOUR income
OUR businesses in Britain are some of the best in the world at treating their investors well.
Many firms here pay chunky dividends that can be relied on year after year.
Mobile phone provider Vodafone, for example, has increased its dividend for 28 years in a row, while energy supplier SSE has done for 26 years.
Now companies elsewhere in the world are starting to understand just how important it is to reward shareholders.
Dividends are the portion of the company’s profit that it gives to shareholders to say thank you for backing the business.
As an investor, look for stocks or funds of stocks that have a high ‘yield’ — the income you’ll get (the pay out on one share, divided by the share price).
Mexico is one unlikely new source of income for investors. Many major companies with excellent dividend track records have local subsidiaries in such developing markets.
Andrex toilet paper and Kleenex tissue- maker Kimberly- Clark has been paying dividends for more than 30 years and has a subsidiary in Mexico whose shares yield 3.7 pc.
The stock is one of the largest holdings in the Stewart Investors Latin America fund, which has turned £10,000 into £11,100 in five years.
Emily Whiting, a fund manager on the JP Morgan Global Emerging Markets Income Trust, which has turned £10,000 into £12,190 in five years, is a fan of KimberlyClark because it’s what experts call a ‘defensive’ stock.
That simply means the firm is less affected by movements in the wider economy, such as recessions or interest rate hikes.
‘ No matter what happens, people will always need toilet paper,’ she says.
Her highest yielding investment is Emaar Development, which is forecast to pay out a hefty 9 pc. The firm builds properties in the United Arab Emirates, including homes, shopping malls, restaurants and hotels such as Dubai’s Burj Khalifa, the world’s tallest building.
The JP Morgan Global Emerging Markets Trust yields 3.9 pc, roughly paying you £ 3.90 for every £ 100 you put in.
Jason Pidcock, manager of the Jupiter Asian Income fund, is looking for opportunities in Asia, where companies paid out a record £100 billion in dividends in 2017 — up almost a fifth on the year before.
He likes Singapore-based ST Engineering, which is the biggest aircraft maintenance firm in the world, and Taiwan- based Hon Hai Precision Industry, which makes parts for PlayStation games consoles and Amazon’s Kindle e-readers. The business, which yields more than 5 pc, also makes products for computer giant Apple.
Mr Pidcock, whose fund was launched a year ago, also likes companies which tap into the growing tourism and leisure trend, adding: ‘Asian consumers spend more of their money on experiences rather than products, such as holidays and entertainment.’
One of the largest investments in the fund is casino operator Sands China — as well as running more casino tables than any other company in the world, the business offers space for conferences, events and concerts and operates more than 13,000 hotel rooms. The Jupiter Asian Income fund pays out £3.90 for every £ 100 invested, although these figures change slightly each year.