Investors who desire exposure to other parts of the world, that offer stronger economic growth prospects, don't have to go digging for foreign listed companies. In fact, some of best ways to get exposure to countries like China and Brazil are right here in the U.S. Today, more than ever, many U.S.-based companies have operations that stretch far and wide throughout the globe. And because the U.S. is still widely considered as the best free market system in the world, it's a safer country than most.
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More Business Abroad than at Home
In fact, there are U.S. names that today get over 50% of revenues abroad. Construction firm Terex (NYSE:TEX) is one such name, as is much larger rival Caterpillar (NYSE:CAT). In fact Caterpillar now generates over two-thirds of its sales and one-half of its profits overseas. That international exposure is a huge advantage in the long run, as continued infrastructure demand in the developing markets will benefit these names. Additionally, the renewed focus on infrastructure here in the U.S. will also favor these two names.
Oil exploration and production company Apache (NYSE:APA) is also highly exposed to international markets, with nearly 60% and 65% of revenues and profits coming abroad, respectively. The shares currently fetch less than 10-times earnings, a discount to other competitors who may not have such a strong overseas business profile.
All About Being Abroad
Then there are other companies that are simply focusing on international growth in order to fuel the next decade or two of increased profitability. Here, you have the classic names, like McDonald's (NYSE:MCD) and Coca-Cola (NYSE:KO), two of the most iconic brands in the world. The Chinese consume a very tiny fraction of Coca-Cola as compared to the amount consumed in the U.S. Similarly, McDonald's is just beginning to penetrate China, and the Chinese are delighted to have such a well-known American brand in their home country. (For related reading, check out Going International.)
The Bottom Line: A Win-Win
As foreign countries continue to develop their market systems, investing in U.S.-based companies with excellent exposure to the growth in those countries offers a much more compelling risk reward scenario over the long run. (For related reading, check out Broadening The Borders Of Your Portfolio.)
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