When most people hear “global wealth protection,” they think of exotic ideas… like offshore bank accounts and gold vaults in Switzerland.
But what most people never consider is an incredible wealth-protection program that actually pays you to participate… one you can join while sitting at your computer. You won’t hear about it on television or in the newspaper. Yet it’s the easiest way to instantly protect your wealth from what’s happening in the U.S.
The “program” is owning the world’s best dividend-paying companies that earn a big chunk of their profits in foreign currencies.
It doesn’t matter what currency the company is making profits in – Russian rubles, Swiss francs, Chinese yuan, Indian rupees, euros, and all kinds of other currencies work just fine. U.S. multinational companies earn their profits in foreign currencies, and then convert them into annual dividends.
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Take a company like Intel (INTC), which produces the electronic “chips” that go into most of the world’s computers and communication devices. Intel has a dominant position in its industry, allowing it to make big profit margins.
The company captures more than 88% of its revenues from outside North America. This is due in part to the fact that the chips are bought and installed overseas in equipment that makes it back to end-users in the U.S., Europe, Japan, and China. Because the revenue base is foreign, if the dollar struggles or even collapses, investors in INTC will make even more money. The same amount of foreign money gets converted to even more dollars – this means more profit back home in the U.S.
Moreover, INTC is shareholder friendly. It’s a cash-generating machine – $15 billion in the past four quarters from operations. It takes some of that cash and pays shareholders back along the way. It’s paid close to $3 billion a year in dividends the past three years… and it also buys back stock (a tax-free dividend that makes each share you own more valuable). The past two years, it’s bought back $7.4 billion in stock. This works out to a “synthetic” dividend yield of more than 6% (a cold cash yield of 3%).
Another one of my favorite “escape the dollar” ideas is going to sound crazy to you… It’s the quintessential American brand: Coca-Cola (KO).
You know Coke is all over America. What you probably don’t know is, Coke sells the No. 1 soda in China – Sprite. Sprite is the No. 2 sparkling beverage in India. While the per-capita consumption in both countries is 15% of what it is in the U.S., most beverage experts believe consumption will grow faster than the U.S. Coke sells nearly 3,300 beverage products worldwide and like Intel, gets most of its revenues (77%) from outside North America.
Coke has paid $10.4 billion in cash dividends to shareholders and purchased $1.4 billion in stock over the past three years. Currently, the stock yields 3%, and the company is sitting on a $17 billion hoard of cash. I wouldn’t be surprised to see it increase dividends or buybacks.
Again, this is good news for investors. With Coke, we get a cash dividend, exploding emerging-market growth, and exposure to foreign currencies. This exposure to foreign markets means more gains for you if the U.S. dollar gets cheaper.
Don’t get me wrong… for folks with lots of money, dressing up in a suit and walking into a Swiss bank to talk gold and bank accounts is a good idea. But the fees will eat into your savings.
By owning big global businesses, you get wealth protection and a growing stream of dividends… and you can participate in this “program” from your living room.
Here’s to our health, wealth, and a great retirement,
— Dr. David Eifrig
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Source: Daily Wealth