Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

International Dividend Stock Plays to Hedge Against a Weak U.S. Dollar

Companies / Dividends Oct 04, 2012 - 01:36 PM GMT

By: Roger_Conrad

Companies

Politics and investing rarely mix well. That’s worth keeping in mind as election-year rhetoric heats up this month. But no matter who wins the White House and Congress in November, investors should have money beyond the dollar.

Foreign-based power, pipeline, communications and water companies are the ideal vehicles. Not only do you benefit from countries growing faster than the US. They also pay dividends and are priced in currencies other than the US dollar, so the buck’s loss is US investors’ gain.


The greenback isn’t yet crashing, as its many detractors have repeatedly predicted. In fact, it’s still clearly the safe haven of choice. And, ironically, if there is a fiscal cliff come January 2013 recession worries are likely to send investors scurrying back to it.

The Federal Reserve’s third round of quantitative easing (QE3), however, is fundamentally a weak dollar policy. That means we can count on other currencies to gain ground normally versus the buck in coming years.

There’s no substitute for owning stocks backed by strong underlying businesses.

But buying a few that pay dividends in other currencies is a great way to tap into dollar weakness without sacrificing growth or yield. And you’ll be protected in the unlikely event of a total US dollar meltdown.

Canadian dividend stock, Atlantic Power Corp (TSX: ATP, NYSE: AT) for example has reported several favorable developments, including the hiring of an experienced chief financial officer, solid second-quarter results and strong progress on the construction of the 300-megawatt Fort Hills wind farm in Oklahoma.

Analyst opinion has remained decidedly neutral to negative, mainly because management faces a challenge re-contracting its Florida natural gas plants. I expect the mood to improve as Fort Hills opens in late 2012.

Meanwhile, Australia’s dollar is backed by similar strengths as the Canadian dollar. The difference is the US is less important as a trading partner, allowing the country to let the currency float more--giving its stocks somewhat more upside.

AGL Energy Ltd (ASX: AGK, OTC: AGLNF, ADR: AGLNY) and APA Group (ASX: APA, OTC: APAJF) are both invest-to-grow stories, focusing on electric power and gas pipelines, respectively.

Both are capitalizing on Australia’s enactment of a carbon tax to encourage fuel switching to natural gas from coal. Both have very strong balance sheets and are increasing dividends, which are paid in Australian dollars.

AGL trades as an American Depositary Receipt (ADR) on the US over-the-counter (OTC) market under the symbol AGLNY, which should make it relatively easy and cheap to buy here.

APA has only an OTC symbol, but its market capitalization exceeds USD3 billion and trades on good volume.

Both are easy ways for US investors to stick their toe in what’s an undiscovered continent for many. Both companies pay dividends and report earnings twice a year rather than quarterly.

Income investors will want to buy before the next dividend declaration dates, which should be on or about Dec. 17 for APA and Feb. 26, 2013 for AGL.

Both companies recently reported very solid results for fiscal 2012, which winds up at the end of June, mid-winter for the Southern Hemisphere. For more ways to hedge against global currency devaluations, check out The Top Precious Metal Stocks to Own Now.

Roger Conrad is the preeminent financial advisor on utility stocks and income investing. He is the editor of Big Yield Hunting, Australian Edge, and Canadian Edge, as well as Utility Forecaster, the nation's leading advisory on electric, natural gas, telecommunications, water and foreign utility stocks, bonds and preferred stocks.

Mr. Conrad has a track record spanning three decades, delivering subscribers steady double-digit gains of 13.3% annually since 1990. And he’s done it all with a focus on capital preservation and risk minimization by investing in big dividend stocks including Canadian Income Trusts, high-yield REITs, MLP investments, among many others.

Mr. Conrad has a Bachelor of Arts degree from Emory University, a Master's of International Management degree from the American Graduate School of International Management (Thunderbird), and is the author of numerous books on the subject of investing in essential services, including Power Hungry: Strategic Investing in Telecommunications, Utilities and Other Essential Services

© 2012 Copyright Roger Conrad - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in