We live in interesting times, when it is much easier to increase capital, how to find a source of stable dividends. US and Russian markets recent 5 years add more than 15% in year. But at the same time, the dividend yield of the indices fell back to multi-year lows. We list seven securities to obtain a stable and high rent in two currencies at once.
How did you choose
A pensioner's portfolio should be radically different from that of a young and mature investor. Not only by the ratio of stocks and bonds, but also by the age and reliability of the selected companies. Young people have the right to make financial mistakes, the elderly have him, usually, No.
Basic principles, underlying a sound rental portfolio, can be learned from Benjamin Graham's investment rules, later developed by Warren Buffett. Large companies should be bought, out of reach of competitors, steadily growing and possibly inexpensive.
We have added two more principles: sectoral and currency diversification. A portfolio of individual stocks must cover all key industries, in order to sag less on corrections and capture as many market trends as possible. And it must be in two currencies, what Graham and Buffett had no idea about, because both did not live in Russia.
Our bi-currency top 7
The selection includes one share from each of the seven main specs, forming indices S&P 500, RTS and Moscow Exchange. In reality, there are more of them., but we removed those, which are less 5% weight benchmark, for example, utilities and real estate. They deserve a separate discussion..
In the healthcare sector, it is definitely worth choosing papers from a foreign list. There are no analogues to American and European pharmaceutical giants on the Russian market., especially with high dividends. The topic of health is trending: most countries' populations are aging. Medical companies have jobs for decades to come.
Abbvie fits all parameters: it is one of the ten largest companies in its sector, she has one of the largest portfolios of medicines for intractable diseases, including cancer. And the main thing: Abbvie pays a dividend of 4,7%, being a dividend aristocrat (enhances 49 consecutive years).
In the commodity sector, Russia's positions are traditionally strong, and there is plenty to choose from. Norilsk Nickel meets the main criteria for a pension portfolio: heavyweight market (fifth in the index), unique position in the global market (largest palladium producer), pays dividends almost uninterruptedly with 2004 G. Now the rate of return is 7,6%.
– Coca Cola
Consumer everyday goods. Here again, there is no equal to the US market.. Large selection of classic security papers, but now Coca-Cola is on good levels. Ranked in the top 3 largest companies in this sector, slightly overtaking PepsoCo. There are no other notable competitors. Raises dividends 59 consecutive years. The current rate of return is 2,9%.
Finance is another of the few sectors, where the Russian market can give odds to foreign counterparts, Really, this only applies to one paper. Sberbank fits the classic criteria of a pension strategy: first place in terms of assets in the country, leader by weight in the index, steadily growing business, high dividends (actual rate - 5,7%).
Cyclical consumer sector. Here, too, it is better to give priority to America. There are simply no analogues in Russia. While the auto industry, tourism, non-food retail and other typical representatives of the sector are undergoing restructuring, surely only good old fast food remains afloat. McDonald’s is out of reach of competitors in terms of the number of points and sales volume. And this is an exemplary aristocrat: pays 2,2% now and increases payments already 45 years.
Networked oligopolies reign in the communications sector, and Russia in terms of the main trends differs little from abroad. MTS in 15-20 times fewer representatives of the American "big three", but its market is several times smaller. The company is the industry leader in Russia. The company consistently pays dividends from 2003 G. The current amount of the payment is 9,7%.
Non-raw materials industry. It's hard to find a company in Russia, which could reflect the growth of the entire industry. There is such paper in the USA, and this is 3M. The company produces 60 thousands of items of goods: from workwear to electronics, having a portfolio of more than 100 thousand patents. Has the unofficial status of the "dividend king", increasing payments over 60 years. Current Bid - 3%.
Our top 7 stocks are an example of a retirement rental portfolio, balanced by industries and currencies. The dollar portion includes dividend companies, who find it difficult to find analogues in Russia. The ruble part relies on domestic issuers with a strong market position and a focus on dividends.
The dividend yield of such a portfolio is now (when distributed in equal shares between securities) is 5,1% per annum, including 3,2% on the dollar side and 7,7% in ruble. Taking into account the devaluation of the national currency (on average by 10% in year, counting with 2012 G.) American dividends from our selection in absolute terms in rubles may equal Russian dividends over the next ten years.
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