Some pundits will tell you that income requires risk, and there are no safe investments with high yields. Emerging market stocks such as Banco Marco SA (BMA, quote), CNinsure Inc (CISG, quote) and Telecom Argentina SA (TEO, quote) beg to differ.Each of these stocks offers a safe dividend more than twice the average for a company on the Standard & Poor’s 500 Index. The dividend yield for CNinsure Inc. is over 13%. Banco Marco SA provides double digit income too, at 10.21%. The dividend yield for Telecom Argentina is almost 8%.
The fundamentals for the income from each company are strong: there is no high risk to the high yield. The price-to-earnings ratio for each is under 10, less than half the average of about 20 for a stock on the Standard & Poor’s 500 Index. The mean analyst recommendation for all three is “Buy” or better. Debt to equity is modest at 0.3 or lower, and the payout ratio is under 50%.
Obviously, there is risk to any investment. Even the United States was downgraded last year. But emerging market companies with high dividends, high analyst ratings, and low debt are an attractive package for any risk-averse investor.