We live in an interconnected world. Chances are reasonably good that even if you're actively looking to buy American, part of what you're buying can trace at least some of its roots overseas. As a result, it makes sense to consider businesses headquartered outside the United States for at least a portion of your portfolio. After all, if their products and services are worthy of your cash, you may very well find their stocks to be a worthwhile use of your money as well.
The first step is recognizing those international companies and what they do and how their products may fit into your daily life. With that in mind, here are three international companies whose products your soon use.
No. 1: A global leader in regional airplanes
Brazil-based Embraer (NYSE:ERJ) is the third largest airplane manufacturer in the world and a leader in producing regional jets -- those smaller planes that take on less traveled routes. Although the curtailing of travel because of coronavirus pandemic in 2020 has been devastating to airlines, there's good reason to believe travel will return once it's safer.
On that front, Embraer's regional jets . If there has been a migration trend since the pandemic started, it's that people have moved out of big cities to find more space. As employers recognize that they can thrive with remote workforces, that outmigration from urban cores may very well become a longer-term trend.
If that's the case, air travel will need to adapt by recognizing that there will be a corresponding shift in how and where travelers fly. The farther away from big cities people are, the more attractive the smaller airports and shorter-haul flights become. That could mean a structural long-term shift toward the type of flights and planes that Embraer specializes in.
Even if that migration isn't permanent, chances are that air travel won't immediately bounce back to pre-pandemic levels. After all, companies that have adapted to remote work may decide they don't need or want to take the risk from as many face-to-face in-person meetings, thus slowing the return of business travel. Airlines may adapt to that trend by sending smaller planes along their routes -- again a potential win for Embraer and its regional jets.
No. 2: An international titan in adult beverages
UK-based Diageo (NYSE:DEO) is one of the largest alcoholic beverage businesses in the world. It owns some of the most iconic brands in the business, including Johnnie Walker, Guinness, Baileys, Smirnoff, and Crown Royal. Alcohol manufacturing tends to be a somewhat recession-resistant business. In good times, people may go out more, spending on quality alcohol at higher bar prices. During tough times, they may instead drown their sorrows at home, hurting the bars more than the alcohol makers.
With all the uncertainty in the world at the moment, having an investment that is less tethered to the overall economy can be a good thing. Of course, that means you can't really expect Diageo's investment performance to light the world on fire. Still, if you assume modest growth over time and add to it a dividend yield of around 2.3%, you might find Diageo to be a global titan with reasonable long term return potential.
No. 3: The maker of a reasonably effective COVID-19 vaccine candidate
UK-based pharmaceutical giant AstraZeneca (NASDAQ:AZN) recently announced that its COVID-19 vaccine candidate was found to be 70% effective in its phase 3 trials. Even more promising, a subset of the trial suggested that a combination approach of a found by other vaccine candidates.
Having multiple potentially successful vaccine candidates is a great thing for consumers in this pandemic. After all, competition tends to help lower prices for consumers. In addition, the different vaccines address the virus in different ways. That provides hope that people who may not respond to one vaccine may respond to a different one, helping improve the overall success rate and coverage rate from vaccinations.
Given the radical changes to all of our lives and work as a result of the COVID-19 pandemic, AstraZeneca's new vaccine may very well be an international product we'll all soon use. If not that particular vaccine, then likely another one of the promising ones in development.
Open your horizons with strong international companies
Although Embraer, Diageo, and AstraZeneca all operate in different business lines, what they all have in common is that they are international companies that do lots of business in America. Their operations are strong enough that you've likely heard of -- if not directly used -- their products. That strength and reach make them certainly worth considering as you look to broaden your investing horizons beyond the U.S. border.