Investing in Global Dividend-Paying Stocks
Broaden your horizons and boost your total returns.
Traditional dividend-paying companies, such as big banks,
constitute a significant portion of the Canadian market. As a
result, most Canadian investors know the benefits of investing in
them: regular income, better total returns than non-dividend payers and lower
volatility than investments in the overall market.
Perhaps less familiar to investors, though, are the global opportunities for investing
in market-leading, brand-name, dividend-paying stocks.
How do dividend-paying stocks benefit you?
A dividend payer is typically an established, well-managed
company with a stable business. Dividends contribute significantly
to its stock's total return (total return =
capital appreciation + dividends). Better yet, companies typically
pay dividends in all types of market environments - boosting returns in
good times and offsetting the effects of market reversals.
Companies that pay dividends have historically outperformed those
that don't. Furthermore, those companies that have increased their
dividend payments over time have outperformed their peers that haven't
(see table below).
Why invest in global dividend-paying stocks?
Dividend-paying stocks have been an important part of the global
investing trend that has gained increasing favour in recent years.
You can find dividend-paying companies around the world.
Despite differing investment environments in their respective countries,
they share many of the same attractive characteristics: strong management,
brand recognition and healthy cash flow. By investing in recognized global
giants like IBM Corp. and Toyota Motor Corp.,
investors get stability plus regular dividends.
Here's another advantage for Canadian investors-global dividend
payers also offer exposure to more opportunities and greater diversification
across a broader
range of businesses than the Canadian market can.
In addition, the dividend yield in many global markets is even
higher than that available in Canada. And, as in Canada, dividend-paying
stocks have outperformed
non-dividend payers in foreign markets.
Get the power of dividends working for you.
RBC Asset Management has a solid track record of investing
in dividend-paying stocks. Over $11 billion of the mutual funds we
manage, such as the RBC Global Dividend Growth Fund,
include dividend-paying stocks from around the world.
For more information, ask an advisor
about global dividend-paying companies and how you can take advantage
of the opportunities in this segment of the market.
