ADRs and reported yield

Discussion in 'Financial Planning' started by Tad Borek, Dec 9, 2011.

  1. Tad Borek

    Tad Borek Guest

    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 FT.com to
    be reliable, including for these ADRs, but the new WSJ.com is spotty -
    sometimes not even displaying a yield.

    -Tad
     
    Tad Borek, Dec 9, 2011
    #1
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  2. Tad Borek

    dumbstruck Guest

    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.
     
    dumbstruck, Dec 11, 2011
    #2
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