Despite returns north of 40% over the past year, Russian large cap stocks continue to offer substantial dividend yields and attractive valuations. Compared to other emerging markets, Russian dividend yields are substantially higher, while valuations are several multiples lower. Russian equities also compare favorably to U.S. large cap equities based on those metrics.
Russia Exhibits Higher Dividends at a Lower Valuation
Source: Factset.
Russia's Earnings and Dividend Yields Nearly Doubled
Source: Factset.
Russia’s suppressed valuations are largely a result of geopolitical issues weighing on investor sentiment. At the same time, Russia’s corporate earnings have more than doubled since the start of 2017. Investors may consider adding Russia to their broad emerging markets exposure as a way to enhance income potential without overpaying.
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