International stocks are a solid investment option when the domestic market is volatile because they help diversify a portfolio given that their performance is influenced by different external or macroeconomic factors than domestic stocks. They also can present a wide range of opportunities that are unavailable with domestic stocks.
Because the Federal Reserve is expected to raise interest rates sooner than expected to control inflation, global stocks are experiencing a pullback.
However, there are other country-specific factors that could drive the performance of many international stocks in the near term. So, we think it could be wise to diversify one’s portfolio by adding a few high-quality international stocks. Reasonably priced international stocks Industrial and Commercial Bank of China Limited (IDCBY) and Compagnie Financière Richemont SA (CFRUY) could be solid bets in this regard, considering their fundamental strength.
Industrial and Commercial Bank of China Limited (IDCBY)
Headquartered in Beijing, the People's Republic of China, IDCBY provides various banking products and services and operates approximately 16,197 domestic institutions and 426 overseas institutions. It works through corporate banking, personal banking, and treasury operations segments. The company also offers e-banking services, including Internet, telephone, and mobile banking services.
On March 26, 2021, IDCBY reported its 2020 business performance. It did a good job in coordinating epidemic prevention and control, serving the real economy and business development. The company also continued to strengthen its foundation for stable development and had successes in its transformation and innovation, therefore achieving better-than-expected performance.
IDCBY’s total assets increased 3.1% sequentially to ¥34,367.55 billion ($5,321.57 billion) for its fiscal first quarter, ended March 31, 2021. Its operating income grew 3.8% year-over-year to ¥214.12 billion ($33.15 billion), while its net profit increased 1.5% year-over-year to ¥86.30 billion ($13.36 billion). Also, its net asset value per share came in at ¥7.72 ($1.19), up 3.2% year-over-year.
Analysts expect IDCBY’s revenue to increase 17.9% year-over-year to $33.7 billion for the quarter ending June 30, 2021. The stock gained 18.5% over the past nine months to close yesterday’s trading session at $12.90.
IDCBY’s POWR Ratings reflects this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has a B grade for Stability. Within the Foreign Banks industry, IDCBY is ranked #7 of 100 stocks. To see the additional POWR Ratings for IDCBY (Growth, Value, Quality, Momentum, and Stability), click here.
Compagnie Financière Richemont SA (CFRUY)
Based in Bellevue, Switzerland, CFRUY is in the luxury goods business. It operates through jewelry maisons, specialist watchmakers, and online distributors segments. The company designs, manufactures, and distributes jewelry products, precision timepieces, writing instruments, and leather goods and accessories. It offers its products through owned boutiques and online stores.
CFRUY participated in an industry collaboration to launch the 'Gemstones and Jewelry Community Platform' (GJCP) in April. The GJCP is committed to a transparent, responsible and vibrant jewelry industry. The industry collaboration could help to tackle supply chain challenges.
CFRUY’s Asia Pacific sales increased 19% year-over-year to €5.94 billion ($7.04 billion) for the fiscal year ended March 31, 2021. Its total assets grew 16.1% year-over-year to €35.36 billion ($41.94 billion), while its profit for the year increased 38% year-over-year to €1.29 billion ($1.53 billion). Also, its comparable EPS came in at €2.30 ($2.72), up 39% year-over-year.
For the quarter ending June 30, 2021, the company’s revenue is expected to increase 106.8% year-over-year to $33.7 billion. The stock has surged 95.6% over the past year to close yesterday’s trading session at $12.18.
CFRUY’s POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to Buy in our proprietary ratings system. It has a B grade for Growth, Stability, Quality, and Momentum.
Click here to see the additional POWR Ratings for CFRUY (Value, and Sentiment). CFRUY is ranked #23 of 65 stocks in the A-rated Fashion & Luxury industry.
IDCBY shares were trading at $12.87 per share on Monday afternoon, down $0.03 (-0.23%). Year-to-date, IDCBY has gained 0.47%, versus a 12.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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