Keep An Eye On These 3 International Stocks
Diversifying your portfolio holdings over the years is without a doubt one of the best ways to lower your total risk and maximize your returns. After all, you don’t want to have all of your investment eggs in one basket. With U.S. equity markets under major pressure in 2022, it makes a lot of sense to take a look outside of our borders for new opportunities. Adding exposure to international stocks can provide a great way to further diversify your accounts, and there are plenty of exciting companies operating in economies that are well-positioned to thrive in the coming years.
That's why we've put together a list of international stocks that are particularly interesting at this point in time. Each one of these companies has something unique to offer and could end up being great adds as the global economy continues to recover from the impacts of the pandemic.
Here are 3 intriguing international stocks to buy now:
1. Petroleo Brasileiro SA
First up is Petroleo Brasileiro Petrobras (NYSE:PBR), a company that is also known as Petrobas here in the United States. It’s Brazil’s national oil company and is focused on exploration and production for oil and gas in Brazilian offshore fields.
Energy stocks have been the strongest area of the market this year, and with oil prices expected to remain elevated in the near-term thanks to the conflict in Ukraine, this stock could end up being a bargain at current prices. There’s also a lot to like about how Petroleo Brasileiro is expected to invest heavily in hydrocarbons over the next few years, which could lead to strong production and earnings growth going forward.
This company has access to pre-salt reservoirs in offshore Brazil that allow Petrobas to take advantage of a low-cost supply that other globally integrated companies can’t match. Additional reasons to explore adding shares of this major energy player include a dirt-cheap valuation, as the stock is currently trading at a P/E ratio of 4.34. Combine that with a whopping 14.41% dividend yield and it's easy to recognize why this is such an intriguing international stock.
2. British American Tobacco
Consumer staples stocks like British American Tobacco (NYSE:BTI) are another great place to look for opportunities at this time, as these types of stocks can hold up well even with so many question marks about where the world’s economy is headed. It’s one of the largest publicly traded global tobacco companies and a company with iconic brands including Lucky Strike, Pall Mall, Newport, and Camel. The stock had a huge rally to start the year but has since pulled back to offer an interesting entry point for long-term buyers to consider.
Investors should be attracted to British American Tobacco’s vapor e-cigarettes products, which have become quite popular among consumers in recent years. There’s also a lot to like about how this company holds 31% of ITC Limited, which is the leading cigarette-maker in India.
BTI does have a few risks that investors should understand, especially if the FDA steps in and starts to ban or regulate these types of tobacco products. With that said, the stock offers an 8.99% dividend yield and trades at a beta value of 0.76, which means this is a great international stock for investors that are interested in more conservative plays during a period of heightened volatility in equity markets.
3. Toronto-Dominion Bank
If you’re interested in adding exposure to Canada’s economy, which bounced back in a big way in February, Toronto Dominion Bank (NYSE:TD) could be a great stock to consider. Canada’s unemployment rate fell to pre-pandemic lows in February after employers added 337,000 new jobs, which could mean higher interest rates are coming quickly. That should be a huge positive for Toronto-Dominion Bank, which is one of Canada’s two largest banks. It’s a company that operates in three segments, Canadian Retail Banking, U.S. retail banking, and wholesale banking, and recently reported adjusted EPS up 14% year-over-year.
As a reminder, banks like this one tend to outperform during periods of rising interest rates, and if Canada’s economy continues to get stronger we can likely expect improved loan growth for TD as consumers and businesses obtain better credit ratings. TD is also known to be one of the top issuers of cards in Canada, which is another positive for investors to consider. With a 3.61% dividend yield and a market-leading position in a strong economy, Toronto-Dominion Bank is one of the more intriguing financial stocks to consider adding at this time.