"War is God's way of teaching Americans geography." This quote has been attributed both to Mark Twain and Ambrose Bierce, and it may not have been uttered or written by either. Still, it accurately reflects that many of us are not internationally savvy.
It's also true that many of us investors often fail to look abroad for promising investments. That's a shame because there are roughly 8 billion people on Earth, and only about 334 million of them -- just 4%! -- live in the U.S. All those other folks live where people are building businesses and buying products. Here are three foreign companies to consider for your portfolio.
1. Adyen
If you're familiar with and hopeful about fintech companies, such as PayPal, get to know Adyen(OTC: ADYE.Y)(OTC: ADYY.F). Based in the Netherlands, and with a recent market value north of $35 billion, its shares were recently down about 40% from their 52-week high, presenting a compelling investing opportunity.
Adyen started out focusing on payments and now provides "end-to-end payment capabilities, data enhancements, and financial products in a single solution" to its customers worldwide. Those customers include Meta Platform's Facebook, Uber, H&M, eBay, and Microsoft. (It made big news in 2018 when eBay replaced PayPal with Adyen as its integrated payment processor.) Adyen boasts 27 offices globally and around $840 billion in processed volume in 2022.
Enthusiasm about Adyen has ebbed a bit lately as its growth has slowed following the surge in e-commerce at the beginning of the pandemic. The company is still growing, though. In the first half of 2023, processed volume grew 23% year over year, and net revenue popped 21%. Management has guided that "We aim to grow net revenue annually between the low-twenties and high-twenties percent, up to and including 2026."
2. GSK
Based in England and with a recent market value topping $70 billion, GSK(NYSE: GSK) is a major -- and compelling -- pharmaceutical company. (You may know it as GlaxoSmithKline, but as of last year, it has renamed itself GSK.) Some areas of focus for the company include infectious disease, HIV, immunology and respiratory, oncology, and vaccines. (It has more than 20 vaccines in its portfolio.) GSK used to be a player in consumer health products, but it spun off that business last year as Haleon.
As of last year, GSK boasted close to $7 billion in research and development (R&D) investments, which drives many new products and revenue generators. It delivered more than 2 billion vaccine doses in 2022 and raked in $36.7 billion in revenue from sales of vaccines and medicines. The company recently had 68 vaccines and drugs in development and has had more than 20 approved since mid-2017.
GSK's third quarter featured total revenue up 10% year over year -- 16% if you exclude COVID-related offerings. Its dividend recently yielded 4%, and its valuation is attractive, with a recent price-to-earnings (P/E) ratio of 9.6, well below its five-year average of 16.7.
3. Unilever
Unilever Plc(NYSE: UL), based in England and with a recent market value near $120 billion, is a giant in the household and personal products arena. The company was founded before the Civil War in 1860 and employs more than 120,000 people globally. It boasts brands such as AXE, Bango, Ben & Jerry's, Cif, Comfort, Domestos, Dove, Equilibra, Hellmann's, Knorr, LUX, Lifebuoy, Liquid I.V., Love Beauty & Planet, Magnum, Rexona, Seventh Generation, Sunsilk, Vaseline, and Wall's. The company was founded in 1860 and is headquartered in London, the United Kingdom.
Unilever is pretty huge, but that doesn't mean it's not getting huger. Its third quarter featured underlying sales growth of 5.2% year over year, and its price is up by 5.8% -- with volume only shrinking 0.6%. That's pretty good when you can hike prices and not have sales volume drop much. Meanwhile, the sales of its brands worth 1 billion euros or more grew even more robustly at 7.2%. The company has a new CEO and some new plans as it aims to continue growing.
Unilever's valuation looks appealing, too, with its recent P/E ratio of 13.4, well below its five-year average of 19.4, and its price-to-sales ratio of 1.8, well below the five-year average of 2.4. It's also offering a dividend that recently yielded nearly 4%.
So give these businesses some consideration for berths in your portfolio -- and take a closer look at any that really interest you.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Adyen, Microsoft, and PayPal. The Motley Fool has positions in and recommends Adyen, Meta Platforms, Microsoft, PayPal, and Uber Technologies. The Motley Fool recommends GSK, Haleon Plc, Unilever Plc, and eBay and recommends the following options: short December 2023 $67.50 puts on PayPal and short January 2024 $45 calls on eBay. The Motley Fool has a disclosure policy.
