Every month I take the time to screen stocks for a purchase that month. I have published my screening results for the past few years. The very first test is whether they the company has maintained and increased their dividend for at least 20 years. This is not an easy feat; of the 15,000+ publicly traded companies (including the major markets and OTC) in the US there are only 150 or so that meet this requirement. There are a few reasons why I a number of reasons why this test is important to me but among them they include:
- Eventually, I would like to use this stream of income. By using a company that has increased its dividend every year I have a better chance to provide an inflation proof stream of income.
- The company looks at the dividend as a necessary bill which may lead to fiscal responsibility. Is there a guarantee? Absolutely not, but these companies have weathered multiple recessions.
- I bought a business and would like to share in current profits, so I do not have to depend on someone wanting my shares
To get my initial list (which I then research each stock’s metric) I turn to the Dividend Champions and a small part of the Dividend Contenders. Both of these lists are maintained by Dave Fish. These lists are focused on US based companies, but what about those companies outside of the United States? Why should they be ignored? Truth is they shouldn’t be.
Trying to Compile a List of International Companies with US Based ADRs who have Increased Their Dividend for 20+ Years
I knew I wasn’t going to buy a company on a non-US exchange (cost being the main speed bump) so my goal was to find US Based ADRs. An ADR is,
…denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction
Using ADRs provide you with the opportunity to buy an international company through your normal brokerage account.
I was shocked to find out how hard it was to find an accessible pre-populated list like I use every month with the Dividend Champions. I found two great indexes which would be a good start, S&P Europe 350 Dividend Aristocrats and the Global Dividend Aristocrats, but I couldn’t find the underlying members of the index. Very Frustrating. Even the ETFs I found that tracked these indexes didn’t provide all the holdings (just either the top 10 or 25). So, I decided to just use a few different stock screeners. This turned out to be a frustrating process as well.
Using the following stock screen:
- Yield +.01%
provided us 307 equities. I then started to look up each one to determine how long the company had been steadily paying dividends. About 60 deep I gave up! I decided that the process was too time consuming to add on to my hand screens which already takes a few hours per month. My guess is that if I ever revisit the topic I will just end up purchasing an ETF.