Investors are searching for ways to diversify their RRSP portfolios, and owning Canadian stocks with significant foreign operations is one way to get international exposure.
Bank of Nova Scotia
Bank of Nova Scotia has invested heavily in the past decade to build up a large international business, with the primary focus being on Latin America.
In fact, the company has specifically targeted Mexico, Peru, Colombia, and Chile in its international growth efforts, and that trend continues.
The four countries are members of the Pacific Alliance, which is a trade bloc set up to promote the free movement of goods and capital. Combined, the markets are home to more than 200 million consumers.
As the middle class grows, demand for loans and investment products should increase, and Bank of Nova Scotia is positioned to benefit.
The international operations already account for close to 30% of Bank of Nova Scotia’s profits, and that could increase in the coming years.
The company has a strong track record of dividend growth. At the time of writing, the payout provides a yield of 4%.
Sun Life gets the majority of its earnings from its Canadian and U.S. insurance businesses, but the opportunities in Asia are likely the most attractive for buy-and-hold investors.
The company has strong partnerships or subsidiary operations in India, the Philippines, Vietnam, Indonesia, Hong Kong, and Malaysia. Middle-class wealth is expanding in these regions as well, and the opportunities for Sun Life to capitalize on the significant population base are enormous.
The company bounced back quite nicely after the Great Recession and has returned to dividend growth. The distribution currently has a 3.4% yield.
Fortis owns natural gas distribution, power generation, and electric transmission assets in Canada, the United States, and the Caribbean.
Large acquisitions in the U.S. in recent years have tipped the majority of the company’s assets to that country. This provides investors with a great way to get exposure to American growth.
Fortis gets most of its revenue from regulated assets, which means cash flow should be reliable. This is part of the reason the company has managed to raise its dividend every year for the past four decades.
Investors who buy today can pick up a yield of 4.2%.
The bottom line
An equal weight in all three stocks would give an investor nice international exposure through solid Canadian companies.
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Fool contributor Andrew Walker has no position in any stock mentioned.