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Dividends from US companies
richard686
Posts: 53 Forumite
Newbie questions:
I note that many NYSE traded stocks have high dividend yields. Is it possible to invest in these companies directly from the UK or is this best achieved with a US focused Income fund? What are the tax implications if it's possible to invest directly?
Is there an online tool/site that allows easy analysis of dividend history for specific stocks in the UK and USA or other regions for that matter?
Cheers.
I note that many NYSE traded stocks have high dividend yields. Is it possible to invest in these companies directly from the UK or is this best achieved with a US focused Income fund? What are the tax implications if it's possible to invest directly?
Is there an online tool/site that allows easy analysis of dividend history for specific stocks in the UK and USA or other regions for that matter?
Cheers.
0
Comments
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You can invest with brokers in the UK, make sure they accept a W8-BEN form or you will be subject to 30% withholding tax on dividends. Even with this form there is a 15% withholding tax on them.
Also beware of foreign exchange charges which can be up to 2% each way, not usually disclosed.
US income funds are not common as US companies generally avoid paying high dividends and prefer share buybacks due to the tax advantages. You may want to look at that also as opposed to dividend payers as it's better for you as a UK investor too. Companies such as IBM have tiny dividends but enormous share buybacks every year. That saves you withholding tax and FX charges.
Good website for US companies is ADVFN.com or Morningstar.comFaith, hope, charity, these three; but the greatest of these is charity.0 -
I wouldn't have said that was true at all.richard686 wrote: »I note that many NYSE traded stocks have high dividend yields.
I think it's been the case, over the years, that dividends aren't particularly important to a US investor and they've generally been low or absent. even in profit-making companies.
An investor looking for dividend income would have far more choice of high yields on this side of the pond, without the currency and tax disadvantages.0 -
Agree with above, US shares are not particularly high yielding in general. And you have to bear in mind the US dividend withholding taxes.
You can invest directly in US shares, or you can invest through a fund. Some examples of funds targeting US dividend income include:
SPDR US Dividend Aristocrats (ETF)
JPM US Equity Income (OEIC)
The North American Income Trust (Investment Trust, which has recently changed mandate. It was formerly a US equity tracker).
You can look at dividend histories on sites like Yahoo Finance (historic prices -> dividends only) or Digital Look.0 -
Thanks, the Yahoo Finance site is very useful.
The stocks I saw with high yields tended to have a falling stock price...0 -
Then it's been showing last year's dividend divided by the current share price.richard686 wrote: »The stocks I saw with high yields tended to have a falling stock price...
What you need is something like DigitalLook, where you can check the forecast dividend, which will give a more realistic idea of likely yield.0 -
Very high yields (and falling share prices) are likely to be a red flag of some kind of problem...
The Dividend Aristocrats ETF uses a method of screening the S&P 500 for companies that increase their dividends every year, and while the yield may be lower the quality is likely to be higher than just screening for yield alone.0 -
Also beware of foreign exchange charges which can be up to 2% each way, not usually disclosed.
Thanks for that. I believe my broker allows me to hold funds in different currencies until I know what I want to do with them. Therefore if I keep dividends in $ and reinvest them over there I shouldn't get foreign exchange charges. Am I understanding that right? What about my Commission charge would that come out of my UK£ and do I still have to pay VAT on US shares or any in the Euro zone?Solar PV cost £5760 (15/03/13)
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Last update 30/09/170 -
Its probably a lot simpler to purchase a US focussed fund or ETF listed in the UK.
There has been a couple of articles recently on diy investor - http://www.diyinvestoruk.blogspot.co.uk/2013/06/blackrock-n-american-income-trust-brna.html
also the Vanguard etf - http://www.diyinvestoruk.blogspot.co.uk/2013/06/vanguard-all-world-high-dividend-etf.html0
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