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ADRs and reported yield

Tad Borek
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      12-09-2011, 06:42 PM
For those who do stock screens based on dividend yield, and would
consider buying foreign stocks via ADRs/ADSs - I just noticed that both
Morningstar and Yahoo Finance (which may use MS, I'm not sure) have some
bad data. They may not translate a dividend paid in euros into dollars
before calculating yield. So not so hypothetically a 2.70 euro dividend
paid on a $91 ADR was shown as a 3% yield, when the actual yield was
over 4% - a significant difference.

I contacted Morningstar and they're correcting it for the security I
noticed, but I don't know how widespread this is (quick spot-check of
three other ADRs - one is right, two are wrong). It's surprising that
such established data sources could have a basic error like this.

So dividend hunters, careful when using that data. I've found to
be reliable, including for these ADRs, but the new is spotty -
sometimes not even displaying a yield.


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      12-11-2011, 08:04 AM
Another issue with ADRs is a new holding charge just permitted by SEC
last month. I may get the details wrong, but normally ADR's deduct a
holding fee from your dividends which they would waive for ADRs not
giving dividends. Last month brokerages started charging "negative"
ADR dividends. So if you are penny wise and pound foolish like me, you
will dump your ADRs.

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