4 Stocks With Emerging Market Exposure That Could Soar in 2018

Emerging markets have swung upward in 2017, and TSX stocks such as Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) and Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) are well established in these markets.

Emerging markets have had an impressive run in 2017. From 2008 to 2016, the iShares MSCI Emerging Markets Index ETF declined 16%. Heavily weighted in China, emerging markets equities experienced a fairly violent correction through Chinese market turbulence from 2015 to 2016.

The index has still not recovered to its peak levels in 2007, making it an interesting growth play with asset valuations so high in developed markets.

Let’s take a look at four TSX-listed stocks that have a foothold in emerging markets. With an aging bull market in North America and Europe, emerging market equities could gain momentum in the coming years.

Silvercorp Metals Inc.

Silvercorp Metals Inc. (TSX:SVM)(NYSE:SVM) is a Vancouver-based silver producer focused in China. It is, in fact, the largest silver producer in China. The company also produces zinc and lead, which have experienced strong upticks in 2017.

The stock closed at $3.28 on October 20 — up 0.92%. Shares have increased 4.8% in 2017 in spite of a relatively stagnant performance for base silver prices. The company reported net income of $10.9 million in the fiscal first quarter of 2018, up 134% year over year. Sales climbed 13% to $39.7 million.

Fairfax India Holdings Corp.

Shares of Fairfax India Holdings Corp. (TSX:FIH.U) have increased 55.6% in 2017 and 61% year over year. The company invests in private and public equity securities and debt instruments in India. I wrote extensively on Fairfax India Holdings this month after the International Monetary Fund (IMF) adjusted its forecast for India in 2017 and 2018.

Net earnings experienced a significant uptick to $268.6 million compared to $38.3 million in Q2 2016. Although the IMF dropped its growth projections for India, the nation is still expected to post strong GDP growth of 7.4% in 2018.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) stock has increased 8.3% in 2017 and 13% year over year. The bank has established a footprint in a number of emerging markets, including Brazil, Columbia, China, Mexico, Turkey, and others.

In its third-quarter results released on August 29, net income from international banking climbed 16% to $614 million. The bank reported positive loan and deposit growth as well as a bump from foreign currency translation. Bank of Nova Scotia also boasts a dividend of $0.79 per share, representing a dividend yield of 3.9%.

Brookfield Renewable Partners LP

Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) is a Toronto-based limited partnership that owns and operates renewable power assets in domestic and international markets.

The stock has experienced 10.2% growth in 2017 and 7% year over year. The company possesses significant assets and ongoing development projects in Brazil and Columbia. In the second quarter, Brookfield posted strong progress in Brazil with improved electricity demand, and in Columbia, generation levels were 20% higher than the long-term average.

There is intense demand for green energy technology in emerging markets with countries working on modernization. Both Brazil and Columbia were signatories for the Paris Climate Accord.

The stock also offers a dividend of $0.58 per share, representing a dividend yield of 5.3%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. Brookfield Renewable Partners is a recommendation of Dividend Investor Canada.

More on Investing

stock analysis

Buy the Dip: 2 Stocks to Buy Today and Hold for the Next 5 Years

These Canadian stocks are trading at discounted valuations, providing an opportunity for buying the dip.

Read more »

bulb idea thinking

Safety in Size? 2 of the Bluest Blue-Chip Stocks I’d Buy Now

TC Energy (TSX:TRP) and another cash cow have huge dividend yields for safe investors.

Read more »

A cannabis plant grows.
Cannabis Stocks

Can Aurora Cannabis Stock Recover in 2024?

Aurora Cannabis stock is down 99% from all-time highs but remains a high-risk bet, despite its cheap valuation.

Read more »

Question marks in a pile
Dividend Stocks

Where Will Brookfield Infrastructure Partners Stock Be in 5 Years?

Brookfield Infrastructure Partners (TSX:BIP.UN) kicked off 2024 with a bang. Where will it be in five years?

Read more »

TFSA and coins

TFSA Investors: 3 Incredible Stocks for 2024

Are you looking for stocks to buy and hold for years for your TFSA? These three stocks could deliver exceptional…

Read more »

A person looks at data on a screen
Stocks for Beginners

3 Warren Buffett Stocks to Hold Forever

Warren Buffett sold some shares in Apple (NASDAQ:AAPL), and the market had questions.

Read more »

Dividend Stocks

Golden Years Gain: Your CPP Benefits at Age 70

CPP users delaying pension payments until 70 will receive substantial monthly income streams in the golden years.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Top TSX dividend stocks are on sale.

Read more »