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10 Foreign Pink Sheet Traded 'Blue Chips'

by: David Hunkar October 06, 2008 | about stocks: BASFY.PK / EONGY.PK / JSAIY.PK / LR / NSRGY.PK / RWEOY.PK / RYCEY.PK / SCMWY.PK / TELNY.PK / TKAGY.PK / TLSYY.PK / UPMKY.PK    

David Hunkar

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Many high quality large foreign companies can be found trading on the Pink Sheets market. These stocks do not attract attention from investors in the way stocks traded on the organized exchanges do. One need not completely ignore the Pink Sheet stock market just because some of the rogue company stocks trade there. One of the main reasons some foreign stocks list their ADRs on the Pink Sheets is because they do not want to follow the expensive regulatory requirements of the Sarbanes-Oxley act. Some of the successful companies that trade on the Pink Sheets are Nestle (NSRGY.PK), E.ON (EONGY.PK), and BASF (BASFY.PK).

To find the top international pink sheet stocks, I ran a stock screener with the following criteria:

1. Dividend Yield > 5%
2. Market Cap. > $5.0B
3. Non-Financial European stocks

The following table shows the list of stocks that met the above criteria:

Company Ticker Country Dividend Yield Sector
RWE AG RWEOY.PK Germany 5.29% Utility
BASF SE BASFY.PK Germany 6.45% Chemicals
Telstra Corporation Limited TLSYY.PK Australia 7.82% Telecom
Telenor ASA TELNY.PK Norway 5.92% Wireless Telecom
Lafarge S.A. LFRGY.PK France 6.26% Construction
Swisscom AG SCMWY.PK Switzerland 5.97% Telecom
Rolls-Royce Group plc RYCEY.PK UK 6.41% Aerospace and Defense
J Sainsbury plc JSAIY.PK UK 6.21% Retail Grocery
UPM-Kymmene Corporation UPMKY.PK Finland 7.87% Paper and Paper Products
Telecom Austria AG TKAGY.PK Austria 6.79% Telecom

1. RWE AG (RWEOY.PK) is a Germany-based conglomerate with operations in gas, water,electricity and oil production. RWE has annual revenues of $62B and the 5-year earnings growth is 22.8%. The annual dividend growth rate in the past 5 years is 23.4%.The company depends on coal for more than half of the power generation operation. When RWE announced earnings in August, the half-year annual profit fell to $1.8B this year from $3.9B last year due to higher carbon-tax credit costs.

2. The largest chemical company in the world, BASF SE (BASFY.PK) announced In September that it plans to acquire the Swiss specialty chemical maker Ciba. The 5-year annual revenue and dividend growth is about 10% and 18% respectively. BASFY has a dividend yield of 6.45%.

3. Telstra Corporation Ltd (TLSYY.PK), is a telecom services provider in Australia. Telstra pays a 7.82% dividend and the 5-year annual revenue growth rate is 2.95%.

4. Telenor ASA (TELNY.PK) is a Norway-based mobile telecom services operator serving 143 million customers at the end of 2007.In the past 5 years, annual dividends has grown at 38%.

5. The French construction materials company LaFarge SA (LFRGY.PK) makes cement, concrete, gypsum and other construction related materials. The P/E ratio is 7.27 and the company has a stable earnings growth of 5-6% each year. LaFarge is globally diversified with operations in Eastern Europe, Asia, Middle East and other regions.

6. Bern, Switzerland based Swisscom (SWMCY.PK) provides telecom services in Switzerland and Italy. SWMCY pays a 5.97% dividend. Swisscom has had a negative earnings growth over the last 5 years.

7. Rolls-Royce (RYCEY.PK) is the famous British company that provides power systems for use on land, sea and in the air. The stock is down about 48% in the last 52 weeks.

8. J.Sainsbury plc (JSAIY.PK) “consists of Sainsbury’s, a chain of 504 supermarkets and 319 convenience stores” in the UK. Similar to grocery retailers in the US, Sainsbury has profit margin of just 1.84%.Annual revenue is $32B.

9. UPM-Kymmene Oyj (UPMKY.PK) is a paper and paper products maker in Finland.This company pays a dividend of 7.87%.Due to slowing demand for newsprint worldwide, earnings have turned negative recently.

10. Telecom Austria (TKAGY.PK) provides both fixed line and mobile telecom services to customers in Austria, Bulgaria, Croatia, Slovenia, Liechtenstein, Serbia, Macedonia, Belarus and the Czech Republic.TKAGY has a dividend of 6.79% and a P/E of 10.48.

Disclosure: None

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This article has 4 comments:

  •  
    Oct 07 02:11 AM
    You missed Enel SpA, the Italian utility that's been expanding into the old Eastern bloc countries.
    Reply
  •  
    Oct 07 02:11 AM
    You missed Enel SpA, the Italian utility that's been expanding into the old Eastern bloc countries.
    Reply
  •  
    Oct 11 02:58 AM
    good stuff, thank you
    Reply
  •  
    Oct 15 08:36 PM
    Oltrdrr
    Thanks for the comment.Yes I did not include Enel Spa (ENLAY) in the above list as I selected only 10 stocks from my screener displayed.Sorry I should made a note of that in my article.Anyway Enel is a great pick.

    granger
    Thanks for your kind words.Glad you like my article.

    -David
    Reply
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