Part of having a well-diversified portfolio is investing in international companies. International companies give investors added diversification (location and currency), exposure to growth opportunities around the world, and access to industries that may not be as well represented in the United States.

If you're looking for three great foreign companies to invest in, look no further than these.

1. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (TSM 2.09%) is the world's leading chipmaker. It's become a top player in the industry through its customized microchips used in many technology products. In fact, you're likely reading this on a device with a TSMC microchip in it.

TSMC's ability to make powerful microchips (their smallest is 3 nm) has earned it an impressive customer base from tech giants like Apple and Advanced Micro Devices, and it's paid off nicely for its top line. The company has posted a revenue compound annual growth rate of 18% since 1994. Still, even impressive numbers couldn't save the company from shedding over a third of its value last year.

TSM Chart

Data by YCharts

There's no doubt that TSMC faces some short-term challenges with a pullback on technology sales and a cyclical semiconductor business sensitive to broader economic conditions. That shouldn't deter long-term investors, though. 

TSMC can be a 2-for-1 win for investors, considering its growth potential as well as a dividend payment. TSMC's current quarterly dividend is $0.45 per share, and its trailing-12-month dividend yield is around 2%. It's not huge, but it's something, and can help investors stomach some of the short-term hiccups the company may run into. 

2. Alibaba

Alibaba Group (BABA -2.09%) has had its share of ups and downs and controversies over the past few years, but brighter days seem to be ahead for the Chinese e-commerce giant. To begin, China drastically eased its zero-COVID restrictions that put a halt to much of Alibaba's core business.

The company also took steps to please Chinese regulators, most notably announcing that it's breaking up into six smaller businesses.

I believe this is a good thing for shareholders for a few reasons. Huge conglomerates are often traded at a discount compared to the sum of their individual businesses. For example, a conglomerate with five businesses worth $100 million each would generally be valued under $500 million.

As individual businesses, Alibaba's subsidiaries would be able to operate with more autonomy, which can translate into more efficient operations and increased focus on the core businesses.

Alibaba's price-to-sales ratio is hovering just above 2.1, around the lowest it's ever been, and more than 80% less than five years ago. 

BABA PS Ratio Chart

Data by YCharts

For an industry leader with its vast market share and resources, that makes the stock fairly undervalued, in my opinion. The upside should be far greater than any long-term risk at current price levels.

3. LVMH Moët Hennessy - Louis Vuitton, Société Européenne

French luxury conglomerate LVMH Moët Hennessy - Louis Vuitton, Société Européenne (LVMHF -0.78%) has been a powerhouse for quite some time. With a portfolio that includes brands including Louis Vuitton, Tiffany and Co., Dom Pérignon, Fendi, Christian Dior, and many more Rodeo Drive inhabitants, LVMH has cemented itself among the best companies in the world.

While consumer staples are products and services that sell no matter the economic conditions because of the necessity factor, luxury goods are similar because of the status factor. LVMH's high net worth consumers make it one of the least sensitive stocks to broader economic conditions. Someone buying designer bags, high-dollar champagne, or five-figure watches likely isn't too concerned with higher inflation.

The past two years have been lucrative for the company after a small setback in 2020 because of the COVID-19 pandemic. Revenue went from 44.6 billion euros in 2020 to 64.2 billion euros in 2021 to 79.1 billion euros in 2022. In a year when many companies saw stagnant or declining sales, LVMH managed to increase its revenue by 23%.

LVMH has pricing power that not many companies can compete with, putting it in a position to thrive regardless of the global economy. Combine that with the company's constant demand and world-class products, and LVMH's dominance is primed to continue for a long time.