Authentic voices. Remarkable stories. AOL On Originals showcase the passions that make the world a more interesting place.
Hank Azaria’s touching, humorous, and often enlightening journey from a man who is not even sure he wants to have kids, to a father going through the joys, trials and tribulations of being a dad.
Gwyneth Paltrow and Tracy Anderson spend time with women who've overcome hardship, injury, and setbacks to triumph in the face of adversity.
Enter the graceful but competitive world of ballet through the eyes of executive producer, Sarah Jessica Parker. This behind-the-scenes docudrama reveals what it takes to perform on the ultimate stage, the New York City Ballet. Catch NYCB on stage at Lincoln Center.
ACTING DISRUPTIVE takes viewers inside the businesses and passion projects of Hollywood’s top celebrities.
Explore what it means to be human as we rush head first into the future through the eyes, creativity, and mind of Tiffany Shlain, acclaimed filmmaker and speaker, founder of The Webby Awards, mother, constant pusher of boundaries and one of Newsweek’s “women shaping the 21st Century.”
They say every picture tells a story and AOL On's new original series My Ink proves it. Travel along as some of the world's greatest athletes bring their tattoos to life through exclusive interviews and visits to their favorite tattoo parlors.
Discover crowdfunded small business success stories with author, comedian, and entrepreneur Baratunde Thurston.
Go behind-the-scenes with racing's hottest, young talent, 17-year-old Dylan Kwasniewski, as he aspires to make it in the #1 motorsport in America – NASCAR
Follow Scott Schuman, the Sartorialist, from the streets of NYC to the capitals of Europe on his quest to photograph and document the best in culture and fashion.
Iconic potter, designer, author and personality Jonathan Adler shares his unique perspective on creativity. Showcasing the inspiration Jonathan finds in the most unlikely people and places, Inspiration Point will add style, craft and joy to your life.
Serving Innovation gives a fresh look into the stories and passions that motivate some of the most innovative tastemakers in America.
A documentary directed by Alex Winter exploring the Napster downloading revolution; the kids who created it, the bands and businesses that were affected and its impact on the world at large.
Nicole Richie brings her unfiltered sense of humor and unique perspective to life in a new series based on her irreverent twitter feed. The show follows the outspoken celebrity as she shares her perspective on style, parenting, relationships and her journey to adulthood.
Jeremy Glaser: Should you look abroad for dividend yield? I'm Jeremy Glaser with Morningstar.com. I'm here today with Josh Peters, Editor of Morningstar DividendInvestor to see if it makes sense to go overseas to look for more income.
Josh thanks so much for joining me today.
Josh Peters: Happy to be here.
Jeremy Glaser: Have you seen a lot of opportunities in non-U.S. stocks when it comes to dividend yields?
Josh Peters: Well, I'll tell you, there can be. On the surface, there are a lot of markets internationally that have higher current dividend yields than the U.S. market does. 3% or 4% is not uncommon. Here our S&P 500 yields less than 2% a lot of the time.
But that said there's more than just current yield at work. There are some drawbacks that investors should be aware of before they start looking abroad for income.
Jeremy Glaser: What are some of the issues that people will face if they're looking outside of the U.S.?
Josh Peters: Well, currency is a natural one that if you buy a company based in Europe then it is going to be in all likelihood and earning a lot of its revenues and profits in euros. It's probably paying its dividends in euros. If the euro falls relative to the U.S. dollar, then your income from that company is going to shrink.
And most U.S. investors have U.S. denominated living costs and other financial obligations to meet, so currency is one consideration.
Another big one is taxes. Many countries around the world will have withholding taxes that are assessed against dividends being paid to foreign investors because they're not getting to tax the shareholders in their own country. They'll try to tax the money as it leaves the country.
And then finally, another point to consider is that dividend payment practices are not always consistent. Whatever the drawbacks of U.S. dividend policies and they are many, mostly in the lack of enough cash. You tend to get predictable quarterly payments. You can pretty much, most of the time, assume that whatever the company paid last quarter, you should get this amount this quarter or more.
That's not the case elsewhere in the world where, say in the continent of Europe, annual dividend payments are pretty common. And if earnings drop, the dividend will drop. The companies there will be more likely to, say, hold the dividend payout ration, the proportion of earnings being paid out as dividends. They hold that constant, rather than try and hold the nominal dividend rate constant.
So that introduces some more variability. You might own a stock for a full year, think you're going to get a 5% yield and then it turns out to be 3%.
Jeremy Glaser: A lot of investors look abroad because they want less exposure to the United States Economy. They're worried about U.S. consumers, worried about debt levels and they want that exposure to Asia and to Europe.
Is there any other way, if you think it's maybe not a great idea to buy the international stocks to get that kind of exposure?
Josh Peters: Yeah. I think buying U.S. multinationals and other U.S. companies that perhaps in some cases have all their operations outside the United States, a Philip Morris International a great example of that.
They give you the opportunity to have a lot of the advantages to investing domestically, predictable dividend paying practices. You don't have withholding taxes. You owe tax on the dividends that you receive perhaps but you won't have this extra withholding tax that you might just lose as an investor in a qualified account.
You're going to have your traditional American GAP to prepare your financial statements. Everything is just a lot simpler. You've got all the transparency and the built-in advantages of being a domestic investor. But you're still getting a lot of international exposure.
Think about the big healthcare companies like Johnson & Johnson and Abbott Labs, 50% of the business or thereabouts is overseas. As overseas markets are growing around the world, you get that growth and you get it translated back into dollars. And if the dollar depreciates that would benefit you investing in these companies.
Jeremy Glaser: If you're absolutely dead set on buying a dividend-paying stock outside of the U.S. Do you have any suggestions right now?
Josh Peters: The way I like to think about is that for me to buy something that is based in a different country where I'm not on the ground, I'm not watching the same TV shows or reading the same papers, just kind of being part of another society. I feel like I need a higher hurdle rate, a higher indicated return which I define as dividend yield plus dividend growth prospects in order to feel like I'm getting enough to compensate me for the additional risk.
And one of these companies that has met this hurdle for me is a utility company called National Grid. It's based in the UK. The UK is already a pretty good country to go prospecting for dividends because there's a consistent set of dividend payment practices.
Most companies pay twice a year. They have what's called a smaller interim dividend then a larger final one. But usually whatever you get will be at least equal to what you got for that payment a year ago. So you've got some consistency there.
You also have a tax treaty between the UK and the United States which means you don't have that withholding tax issue you would have with buying, say, Nestle, a Swiss company. Or even Canadian companies, there's a 15% withholding tax you may have to deal with.
But what I really like about the business is that there's sort of a natural hedge built into National Grid. About half of the business is actually here in the United States where National Grid has acquired transmission and distribution utilities in the Northeast. So I know how those work. Being a U.S. investor and a U.S. utility customer, I've got a pretty good idea how those work.
In the UK what you have is a regulatory framework where prices and revenues and even profits by extension are really set on an inflation-indexed regime. So if you think about the currency risk associated with investing a business that half the business is in the UK, if you saw a big depreciation in the pound chances are you'd also see some inflation pass through.
National Grid would benefit from that. They would essentially get that real return restored to them and they would be able to pass on that higher dividend rate to their shareholders.
So there is a lot of very good things about National Grid as a business. There are a lot of good things about the UK in general in terms of structure for those who would look for overseas income. But the pound has been falling. Britain's got some pretty severe economic problems. Even there, I think it pays to be picky. But National Grid is one that I do like.
Jeremy Glaser: Great. Josh thanks for taking the time today.
Josh Peters: Happy to be here.
Jeremy Glaser: For Morningstar.com, I'm Jeremy Glaser.