Читать книгу The Dividend Investor - Rodney Hobson - Страница 22

Foreign-based companies and those with overseas operations may declare their results in a foreign currency, most likely US dollars or euros. This can make sense if most of their income and expenditure is priced in that currency.

Some UK companies present their results in dollars, particularly those in the oil industry or mining, where products are priced in the American currency.

European companies will normally declare their results in euros, although they may use pounds if their shares are listed in the UK. Otherwise the international currency is the US dollar.

The dividend will still be paid to you in pounds sterling but the amount will depend on the prevailing exchange rate. It follows that dividends from these companies tend to be more erratic as exchange rates fluctuate. When the value of the pound falls you do better; when the pound rises your income is reduced.

Another drawback is that foreign companies will operate within different political and legal systems. This is particularly relevant if you choose an overseas company with its shares quoted on AIM, where the regulatory framework is less rigorous.

Nevertheless, a willingness to invest in companies declaring their results in dollars or euros will widen your potential range of investments and spread your risk.