Global stocks are gaining, if not at the pace of domestic equities. While the S&P 500 has risen 17% year to date, the EAFA index of large- and mid-cap stocks based in countries other than the U.S. and Canada has gained 9.5%. Over the past five years, the performance gap has been wider, with the S&P 500 advancing 94% compared to a 32% gain in EAFE. But the underperformance has given global stocks a valuation advantage, particularly in the area of dividends. Consider that the EAFE dividend yield of 2.9% is 170 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors, who have endured recent wide swings in prices for rate-sensitive equity in areas such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S. interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection of companies that pay dividends, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term BUY rating from an Argus analyst. Note this list of approximately 25-30 companies offers exposure to eight of the 11 major industrial sectors. The list includes companies from 10 countries.

After a calm first half of the year -- when the VIX Volatility Index averaged a low 13.5 -- the closely-watched fear index jumped to almost 40 after the Japanese yen/semiconductor stock carry-trade fizzled in early August. And while the VIX backed off that alarming level in recent weeks, it hasn't made it back below 14, let alone the 12-level from back in May. Should investors be alarmed? In our view, after an impressive 18% run thus far in 2024, stocks are reacting to some of the risks we pointed out for the year, such as geopolitical developments (Mideast, Russia, China), high interest rates (the Fed hasn't cut yet), the chance of recession (the yield curve is still inverted), stubborn inflation, and the upcoming 2024 U.S. presidential election. On the positive side, we anticipate the U.S. economy will avoid a recession into 2025, the Fed will start to lower interest rates next month, and earnings are poised to grow at a high-single-digit rate over the next few quarters. All that said, the fear index reading is around 16.0, below the 15-year average of 20.5 and signaling that investors aren't overly worried (yet) about the outlook. This compares to the average VIX of 24 during the most-recent bear market and 35 during the financial crisis of 2008-2009. During the long bull market in the 2010s, the VIX averaged 18 and even touched lows below 10 in 2017. We think that the S&P 500 is in the early stage of a new bull market that dates to October 2022. And while the path for equities won't be straight up, we suggest investors over-weight portfolios toward stocks at the current market and economic juncture.

Founded in 1972 by former IBM employees, SAP provides database technology and enterprise resource planning software to enterprises around the world. Across more than 180 countries, the company serves 440,000 customers, approximately 80% of which are small- to medium-size enterprises.

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.