Investing in global or international stocks could be a great move for U.S. investors. Not only are global stocks less correlated to indices like the S&P 500 than domestic ones, but investors can also enjoy currency diversification. And, they may potentially avoid paying withholding taxes on their investments if made strategically.
More broadly, though, global stocks may improve risk-adjusted returns over the long run. This is especially true as the valuations of many U.S. equities have become too rich for most investors’ tastes. Thus, they are seeking opportunities in other developed and emerging markets.
So, if you are on the lookout for some global stocks to add to your portfolio, then read on. Here are the best names to consider.
Alibaba (BABA)
Alibaba (NYSE:BABA) is a Chinese multinational conglomerate specializing in e-commerce, retail, internet, and technology. Also, owning BABA shares exposes one’s portfolio to the continued rise of China. Further, the company’s portfolio of platforms and technologies is impressive.
There are a few reasons I’m bullish on BABA stock. First, despite some initial struggles, it’s working to reestablish its dominance in the cloud industry for Chinese consumers. Additionally, it’s working to make its Taobao app a universal one, with AI poised to play a huge part.
Recently, to increase investor interest, BABA started paying a dividend, which is 1.42%. Also, it has plenty of free cash flow generation to support buying back shares.
Unilever (UL)
Unilever (NYSE:UL) is a British-Dutch multinational consumer goods company. With a strong international presence, it’s known for producing goods ranging from ice cream to cleaning and personal care products.
UL stock is perhaps one of the best examples of one of those global stocks to consider. It operates in over 190 countries. This extensive reach means that its goods are used daily by nearly 2.5 billion people.
Due to its sheer scale of operations, UL has a sturdy competitive moat. This allows it to protect its market share from competitors with its thousands of product lines.
Also, UL stock looks cheap, trading at just 13 times earnings. And, its dividend yield of 3.86% supports the bull case to invest in this stalwart consumer staples stock.
Taiwan Semiconductor Manufacturing Company (TSM)
Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is the world’s largest dedicated independent semiconductor foundry. A TSM investment gives investors exposure to not only the chip industry but also the growth region of southeast Asia.
TSM’s prospects are solid, with management making bullish comments and giving a strong outlook for its expected performance. These comments came off the back of TSM posting a strong earnings report for the previous quarter. In fact, earnings per share held at $1.44 in the fourth quarter, beating the consensus estimate of $1.39 per share.
The results partially supported advancements and the rollout of its new chip technologies.
“The continued strong ramp of our industry-leading 3-nanometer technology supported our fourth quarter business,” management stated.
Looking ahead, TSM expects 20% revenue growth for 2024. Wall Street is slightly more bullish on TSM’s prospects, as it expects a 21% increase. Also, analysts forecast EPS will surge 18.19% by the year’s end.
Overall, Wall Street rates TSM as a strong buy, and it has a modest 10.59% upside for its stock price.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
