Make Money in Big, Global Dividends the Easy Way

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    Published Wed, 13 Jun 2012 14:22:50 GMT on The Motley Fool


    Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to fill your portfolio with some solid dividend-paying stocks from around the world, the First Trust Dow Jones Global Select Dividend Index Fund ETF (NYSE: FGD) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in a lot of them simultaneously. The ETF recently yielded 4.8%.
    The basics
    ETFs often sport lower expense ratios than their mutual fund cousins. The First Trust ETF's expense ratio -- its annual fee -- is 0.60%. The fund is fairly small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
    This ETF has performed rather well, beating its benchmark handily over the past three years. Still, it's also very young, with just a few years on the books. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
    With a low turnover rate of 22%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
    What's in it?
    Plenty of global dividend payers had strong performances over the past year. U.S.-based CenterPoint Energy (NYSE: CNP), for example, gained 11%, and yields about 4%. Fitch recently upped the company's rating, citing its debt reduction and relatively stable, regulated business. The company is also a customer-satisfaction leader.
    Other companies didn't do as well last year, but could see their fortunes change in the coming years. CenturyLink (NYSE: CTL) gained just 1%, but has been yielding more than 7%. America's third-largest telecom company, it sports a heavy debt load, though it has been refinancing that. The company has been busy, merging with Qwest and swallowing cloud company Savvis. It aims to grow revenue and cut costs, and is investing in fiber and broadband.
    Sinking 8% over the past year, TE Connectivity (NYSE: TEL), based in Switzerland (with executive offices in Pennsylvania), recently yielded 2.8%. Formerly Tyco Electronics, it's a networking and electronics efficiency specialist, and is poised for long-term success as companies boost their properties' efficiency. Management recently pointed out that the company is improving its own efficiency and productivity, too, generating generous free cash flow, expanding in emerging markets such as China, growing earnings by double digits, and capitalizing on broadband acceleration.
    France Telecom (NYSE: FTE), down 34%, has recently sported a whopping dividend yield of more than 14%, although that's slated to come down in the next year as cash flow falls. The company has been pressured by a competitor, but many view the damage as done and the stock as a bargain now. Even after the cut, the company will still have an attractive payout. Europe's troubles have caused headaches for the company, but it also has significant business in Latin America, which is growing more briskly.
    The big picture
    A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.... Read more

    Stock name                                     ISIN Last trade   P/E Earnings/Share Dividend/Share Dividend yield
    CENTURYLINK P/E of CENTURYLINK on Bloomberg Quote of CENTURYLINK on CNNMoney FT.com - CTL:NYS P/E ratio of CENTURYLINK on Google Finance Dividend yield CENTURYLINK on Morningstar Dividend CENTURYLINK on MSN Money Dividend CENTURYLINK on Reuters CENTURYLINK dividend US1567001060 37.43   26.3 1.41 2.16 5.77
    CENTERPOINT ENERGY P/E of CENTERPOINT ENERGY on Bloomberg Quote of CENTERPOINT ENERGY on CNNMoney FT.com - CNP:NYS P/E ratio of CENTERPOINT ENERGY on Google Finance Dividend yield CENTERPOINT ENERGY on Morningstar Dividend CENTERPOINT ENERGY on MSN Money Dividend CENTERPOINT ENERGY on Reuters CENTERPOINT ENERGY dividend US15189T1079 23.86   24.5 0.97 0.83 3.48
    TYCO ELECTRONICS P/E of TYCO ELECTRONICS on Bloomberg Quote of TYCO ELECTRONICS on CNNMoney FT.com - TEL:NYS P/E ratio of TYCO ELECTRONICS on Google Finance Dividend yield TYCO ELECTRONICS on Morningstar Dividend TYCO ELECTRONICS on MSN Money Dividend TYCO ELECTRONICS on Reuters TYCO ELECTRONICS dividend CH0102993182 45.56   16.0 2.84 0.88 1.93
    FRANCE TELECOM P/E of FRANCE TELECOM on Bloomberg Quote of FRANCE TELECOM on CNNMoney FT.com - FTE:NYS P/E ratio of FRANCE TELECOM on Google Finance Dividend yield FRANCE TELECOM on Morningstar Dividend FRANCE TELECOM on MSN Money Dividend FRANCE TELECOM on Reuters FRANCE TELECOM dividend US35177Q1058 10.53   27.8 0.00 0.00 0.00

    CENTURYLINK - CTL  


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