Remotely Ivesting in Brazilian Stocks & Top Brazilian Dividend Stocks Follow Dec 07, 2023 · 3 mins read
Remotely Ivesting in Brazilian Stocks & Top Brazilian Dividend Stocks
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The easiest way for a foreigner to invest in Brazilian stocks is to open an international brokerage account with a major global broker that offers access to BM&F Bovespa, Brazil’s securities exchange. Popular choices include Interactive Brokers, Saxo Bank, and TD Ameritrade.

The application process typically requires submitting your personal ID for KYC verification and tax certification like a W-8BEN form. Opening an account usually involves a minimum $500-$1000 initial deposit.

Most brokers allow you to trade BMF&F Bovespa-listed stocks, ETFs and equity options. Real-time market data fees, platform fees and trading commissions apply. You can fund your account via SWIFT wire transfer in USD and use the broker’s currency exchange to trade BRL denominated securities.

Top Brazilian stocks include bluechip companies like Petrobras, Vale SA, Itaú Unibanco, Ambev and Petrobras Distribuidora. You would search for their listings ending in .SA on the broker platform to trade. Popular ETFs provide exposure like BOVA11 and EWZ.

Before trading, research company fundamentals, technical analysis, news flow, earnings calls and macro environment affecting Brazilian markets to make informed trading decisions. Optionally use advanced order types like limits, stops and brackets for risk management.

For receiving dividends, provide your international brokerage account details and payment instructions. Most brokers allow deposit of BRL dividends into your account as cash. Some may have currency restrictions, for example Interactive Brokers requires currency conversions and payments in USD. Confirm this during account opening.

In summary, opening a global brokerage account that provides BM&F Bovespa access makes investing in Brazilian stocks straightforward for overseas traders today using market analysis and risk management strategies. Receiving BRL dividends involves confirming payment routing details upfront.

Brazil has faced economic and political turmoil in recent years but conditions are now improving driven by current reforms agenda focused on fiscal discipline and business environment. Its benchmark Bovespa stock index reached all-time highs in 2022. For investors with long term horizons, Brazilian stocks provide an opportunity to benefit from the country’s recovery and capitalize on attractive dividend yields. Here are four stocks worth considering:

Petrobras PBR

Oil giant Petrobras offers exposure to rising global energy prices and Brazil’s vast offshore deposits. Government interference has reduced but energy remains crucial for Brazil. Petrobras trades at P/E of just 3x and offers very high dividend yield above 35%. Its cost cutting and divestment efforts also lend cash for solid payouts.

Itaú Unibanco ITUB

As Brazil’s largest private sector bank, Itaú Unibanco provides leveraged exposure to an economy rebounding from COVID slowdown. The banking sector environment is improving with rising interest rates and loans growth ahead. Itaú pays out about 55% of profits in dividends. Forward dividend yield is close to 7%. Valuations are also reasonable at 9x P/E.

Ambev ABEV

This beverage giant sells brands like Brahma, Skol and Budweiser in Latin America. Ambev enjoys a near monopoly or duopoly in most markets giving pricing power. Its asset light model generates plenty of cash too. Ambev’s above 5% dividend yield is supported by 60-80% payout policy. Upside exists from premiumization in beer sales. Recent results have been encouraging.

AES Tietê ENGI11

This subsidiary of utility major AES Corp operates a portfolio of hydropower plants across Brazil. Its even cash flows allow generous dividends from project returns. AES pays out 100% profits as dividends under its yieldco structure. ENGI11 currently provides dividend yield approaching 9% based on depressed valuations. As Brazil’s economy recovers, electricity demand outlook is strong too. Renewable energy enjoys incentives also.

While risks remain with Brazilian economy and politics, the high dividend yields above provide an encouraging cushion for long term investors. Our picks trade at reasonable multiples even without considering their distributions and have catalysts for stock price appreciation too. Maintaining investment discipline through market cycles is key to benefit.

Written by Follow