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CNBC
23-06-2025
- Business
- CNBC
These international stocks are well liked by analysts, and they pay dividends
International stocks are having a strong year compared to the S & P 500 – and a few of those global names also happen to offer attractive dividends. The broad market S & P 500 is up just 2% in 2025, which pales in comparison to the double-digit surges the benchmark saw in 2023 and 2024. Uncertainty over tariff policy, shakiness on the path of interest rates – and now the U.S.'s involvement in attacks in the Middle East – have sent stocks on a roller-coaster ride. After the S & P 500's big two-year run, it only makes sense that U.S. investors might want to rethink their international exposure to diversify away from overallocations in Big Tech and U.S. names. "If you looked at international last year, it might've underperformed but this year, international has been a star," said Marguerita Cheng, certified financial planner and chief executive officer of Blue Ocean Global Wealth in in Gaithersburg, Maryland. .SPX VEU YTD mountain S & P 500 vs. the Vanguard FTSE All-World ex-US ETF (VEU) in 2025 Indeed, the Vanguard FTSE All-World ex-US ETF (VEU) saw a return of roughly 5.5% in 2024, but it's now up 14% this year. To get some international exposure, particularly for dividend-seeking investors, she has turned to offerings like the First Trust Target Global Dividend Leaders Portfolio. The strategy in this unit investment trust offers a combination of domestic and international equity names, as well as real estate investment trusts. CNBC Pro scanned through the constituents of that portfolio to find international names that offer dividends. Here are a few of the names that are rated buy or overweight by more than 50% of the analysts covering them, and they have upside of more than 20%, based on FactSet consensus price targets. Panamanian airline company Copa Holdings emerged on the list. U.S.-traded shares are up more than 16% in 2025, and the stock pays a dividend yield of about 6.3%. More than 9 out of 10 analysts covering the name deem it a buy or overweight, and consensus price targets call for more than 50% upside, per FactSet. Raymond James analyst Savanthi Syth reiterated a strong buy rating on Copa in May, noting that the airline delivered "Best In Class 1Q25 Results." The company posted earnings of $4.28 per share on revenue of $899.2 million for the period, topping FactSet consensus estimates of $3.94 per share and revenue of $888.6 million. "Copa noted healthy booking trends with no material change in recent weeks, although visibility is limited to 2-3 months out," Syth wrote. "Demand in North America and the Caribbean appears stable, while Mexico and Central America face headwinds from elevated competitive capacity, notably from Avianca." The analyst's price target of $145 calls for upside of more than 41% from Friday's close. Vale , the Brazilian mining company, is another name that's caught Wall Street's attention. The stock is rated buy or overweight by nearly 60% of the analysts covering it. Consensus price targets call for 32% upside from current levels, per FactSet. In April, Bank of America upgraded the stock to buy from neutral, with analyst Caio Ribeiro saying that the "bottom-up story has improved significantly." In part that's due to the conclusion of a railway dispute and a new management team that includes Gustavo Pimenta as CEO and Marcelo Bacci as CFO. "Vale's discounted valuation combined with its improved bottom-up story offer enough margin of safety to accommodate our more cautious iron ore view," Ribiero said, giving the stock a price target of $11.50. That represents nearly 27% upside from Friday's close. U.S.-traded shares of Vale are up 3% in 2025, and the stock pays a dividend yield of 9.1%. Latam Airlines Group of Chile also made the list. Shares are up 37% in 2025, and the stock pays a dividend yield of 2.7%. Consensus price targets call for 23.2% upside from current levels, per FactSet. Morgan Stanley is overweight on the stock, and analyst Jens Speiss said in a June 10 note that traffic for the airline is up 9.8% quarter to date, topping consensus estimates. "Schedules point to capacity increasing ~11% in June, implying capacity growth of ~8-9% for the full quarter, slightly above consensus (+6.8% Y/Y) and [Morgan Stanley's estimates of] (+7.6%)." — CNBC's Nick Wells and Michael Bloom contributed reporting.
CNBC
10-06-2025
- Business
- CNBC
Uncertainty looms as 2025 nears the halfway mark. How to make sure your portfolio is prepared
Stocks have made a recovered from this year's lows, but uncertainty remains a key theme as the second half of the year approaches – and investors can prepare for it. President Donald Trump's rollout of sharply higher tariffs in April sent stocks on a wild ride, with the S & P 500 at one point dipping more than 20% from its all-time high. Traders' hopes for progress in trade negotiations, along with solid first-quarter earnings, helped the market recover since then, however. The S & P 500 is now less than 2% below its its all-time high. Don't just kick back and wait for a continued recovery, though. "Our little tagline here is 'diversifying for resilience,'" said Michael Arone, SPDR chief investment strategist at State Street Global Advisors. "The thought behind the theme for the second half, is that markets are in suspense," he said. Some of the issues for investors to cinsider now include trade policy, soft economic data and the chance that the Federal Reserve holds off on rate cuts for too long, Arone added. Here's how to get your portfolio ready for the remainder of the year Review and rebalance Ignoring your portfolio's asset allocation, particularly at a time when markets are strong, can result in lopsided positions. For starters, think about how large-cap tech stocks in the U.S. were responsible for the market's surge last year. Failure to prune some of those big positions now, and add to underweight sectors, could result in a portfolio that doesn't reflect your goals and risk appetite. This year, investors who shied away from international markets may have found themselves missing out on sizable appreciation. Consider that the Vanguard FTSE All-World ex-US ETF (VEU) has returned 16% in 2025, while the S & P 500's return over the same period is a little more than 2%. VEU .SPX YTD mountain The Vanguard FTSE All-World ex-US ETF (VEU) versus the S & P 500 in 2025 "If we look through a stock lens, U.S. allocation peaked at 67%, and today it's at 64%," said Arone. "I can tell you there are very few investors I meet with who have 36% of their portfolio invested outside of the U.S. from a stock standpoint." Diversifying into international funds also helps investors gain exposure to sectors outside of Big Tech, said Christine Benz, director of personal finance and retirement planning for Morningstar. "The U.S. is still very tech dominated and growth leaning, but broad non-U.S. indexes are dominated by financials and health care. It's a different set of market components relative to the U.S." Benz likes the idea of investors using a broad global stock benchmark as a guide to determine how much to invest overseas, noting that the split is generally about 60% toward the U.S. and 40% non-U.S. Reassess your goals and risk appetite The market's slide in April might have been a good chance for investors to do a gut check of whether their asset allocation reflects the risk they are willing to take. "My big [issue] is the value of derisking for people who are getting close to retirement," said Benz. "It might not have felt like a great idea to derisk in the throes of tariff-related market losses, but now stocks have clawed their way back into positive territory." Investors who are nearing retirement might want to consider adding safer assets to their portfolios to take advantage of today's higher yields, she added. "Consider taking advantage of the fact that yields are decent today and it will translate to better returns for fixed income versus when yields were very low," said Benz. For savers in retirement plans, this can also mean reviewing where you're directing your contributions. "Let's say you're not ready to retire, but retirement is in the next five to 10 years," said Marguerita Cheng, CFP and chief executive officer of Blue Ocean Global Wealth in Gaithersburg, Md. "You can have some of your existing dollars in something a little more conservative, and when you dollar-cost average you can be a little more growth oriented," she said. Dollar-cost averaging refers to making incremental investments into a certain asset at fixed intervals, say every two weeks, every month or every quarter. By spreading out these investments, you're buying into stocks at different prices over time, instead of trying to wait for the "right" time. Tax-loss harvesting Tax-loss harvesting opportunities may await investors who have taxable brokerage accounts. This involves selling losing positions and using the realized losses to offset gains elsewhere in the portfolio. Be sure to avoid violating the wash-sale rule, which involves selling an asset at a loss and then buying a "substantially identical" security within 30 days before or after the transaction. In such cases, the IRS can block you from taking the loss. Lagging stock sectors this year include energy, health care and consumer discretionary, which might all be solid contenders for tax-loss sales. "Investors with individual stocks, sector funds or ETFs might have an opportunity to take a tax loss in those areas," said Benz.
