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Thornburg Investment Management CIO Brian McMahon on some of the best overseas dividend-paying stocks.
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Now are the best place to find dividends right everybody wants that yield Brian McMahon is somebody who says.
Look outside the US now he's joining us in a Fox Business exclusive from Santa Fe, New Mexico at a text around the world to his favorite foreign -- he's the co manager.
Of the Thornburg investment income builder fund over the past three years up fourteen and a half percent good to have you Brian thanks for being here.
Thank you tries to be here -- -- we've had a parade of people over the past years say oh by -- or by sea drill all -- some US based companies with very nice dividends you're looking out of in a different way.
What is the difference between dividend paying stocks that are overseas and the ones here in America.
Well I think the biggest differences in most markets around the world you don't have double taxation of dividends so.
That if the profits are taxed at the corporate level -- -- the dividends are taxed by.
By the home country so the payout ratios tend to be higher.
That's good OK we like the payoff ratio and and again that.
This people -- come on the show and put it like this.
-- why not invest in dividend stocks it's a way to get a raise when the market might not be doing very much so let's get to some of your names Telefonica Brazil is the one that you really like right now ticker symbol VIB.
What -- yield five point 2%.
Some -- 3.3 percent.
Yeah that's right in fact it's factory.
We expect higher than that the market still getting used to evaluating.
This stock it was it was a -- conglomeration of of several mobile telecoms and -- -- and it's come out of this has -- the largest.
Mobile Telecom in Brazil they have 75 million users and they also of about fifteen millions.
Fixed line users.
We expect from -- -- about who's forty -- this year the stock is priced in the US at 26.
And we think that dividend could be as high as the entire 240 okay but we're pretty sure it's gonna be at least to the recent on -- that's October 7% yield.
Look at right -- some of the recent Imus spoke with that I I have looked and thought let me -- to AT&T and AT&T'S dividend was the one that was five point 2% but you still feel that.
With all that you take into account it'll be a better yield on top of the actual three plus percent.
Yes we think so plus we like the fact that the Brazilian real has gotten cheaper and even though you buy this stock in the US occupied in the US for dollars.
The underlying businesses and -- else so it should help the total return if every objects.
It gets -- some strength again vs the US dollar.
-- -- -- but let me we like and argue that it's a French utility company called Suez.
And I've -- this company is well I was surprised to see that that dividend is pretty significant at this point eight point 7%.
Yeah that's one of the highest in the world this is a -- -- big.
Integrated utility.
With actually worldwide operations -- spirited just completing its supply in of them of a minority of a company called international power.
And when they come out of it -- house.
More than half of there there are operating profits from power generation so it's really mostly an electorate.
Utility they also have a gas companies in France filled -- problems right is it is part of this and there they also have.
A big LNG trading business that the global business and the outside some engineering and stuff in there I'd just say that I would like it it's one of the highest -- That American depositary receipts that means the shares that trade here in the US are hitting a new low today so.
Again he wouldn't be buying high but is there something to be worried about here with this company.
Yes there is certain and I think what investors are worried about it why -- -- a new low as investors are worried that.
The governments of France Belgium and other other countries where they operate will reach and and let -- special taxes -- overseas.
Or that sort of thing I think it's in the price the price is down.
Or roughly 40% over the last year so.
It's in the price.
Your next pick out of the energy sector Royal Dutch Shell let's talk about that dividend that's a four point 5% dividend.
Meantime ExxonMobil only two point 7% say this is your -- what else do you like about royal Dutch.
Well -- like the fact that Royal Dutch Shell is is producing three and a half million barrels of oil equivalent per day.
So it's one of the -- but I also like the fact that they're producing.
Whole oil light substances from gas so there are there one of the big global producers of LNG.
There of the biggest in turning gas into.
Motor fuels.
You may have noticed yesterday they had an announcement that they would.
Be the lead partner in Asia LNG export facilities from British Columbia and Canada and they have three agent partners and that.
So in addition to the -- well I like their expertise in adding value to gas.
And if we get a dividend on top of that.
It's it's very interesting.
-- natural gas is the one part of the energy complex moving higher by about 5% today and again everybody talks about when the -- -- the world comes along and starts converting vehicles into natural gas usage boy that'll certainly be a -- Brian great to see -- thank you for being here.
Thank you it's Brian.
