ADRs as a Dividend Investment
For those of you unfamiliar with the term ADRs, it stands for American depositary receipt. An ADR is a stock that trades in the United States but represents a specified number of shares in a foreign corporation. ADRs are bought and sold on American markets just like regular stocks, and are issued in the U.S. by a bank or brokerage company. For dividend investors looking for diversification, ADRs can offer diversification benefits by allowing us to invest in companies outside of the U.S. and Canada.
Do I invest in dividend-paying ADRs?
In a word, no. The reason I don’t is because I have enough trouble following the stocks that I currently own. Read More…
With so many options out there i just avoid adrs all together.
It should be better made clear that these receipts were created to allow international companies access to U.S. capital markets over-the-counter or through exchanges like NYSE.
Interestingly OTC adrs are less regulated and hence where most of them are. That in itself should be a redflag in what you should pick for your portfolio.
It’s difficult to monitor these foreign companies and the dynamics of their markets ontop of ones here.
I have Nintendo (NTDO.YK) and they pay dividends. Because they are a Japanese company their quarterly reports that i get are in Japanese which is a bit of a problem at times. I just rely on american news sites to get my details.
ADRs are perfectly safe and i have them in my collection of holdings. Not sure why anyone would be concerned.