Best International Stocks to Buy to Capture Global Growth
If you haven’t dipped into international investing yet, it can be tricky. Different countries function differently, and a number of factors can influence stock prices. Luckily, I’m going to cover the best international stocks to buy so that you can diversify your account and add to your returns.
Whether you’re looking for different growth methods or believe in emerging markets, these are some of the best international stocks on the market.
Best International Stocks to Buy
The global economy is growing rapidly, and some companies outside the U.S. generate massive returns. In fact, according to new research from UNCTAD, the global economy is expected to expand at its quickest rate in over 50 years.
Capture your fair share of the growth with some of the best international stocks to buy.
No. 5 Baidu (NASDAQ: BIDU)
- Market Cap: 60.4B
- Country: China
- Focus: Search (similar to Google)
- 1 Yr. Rev Growth (MRQ): 20.4%
Just like Google (NASDAQ: GOOG), Baidu is the top search engine in China. All in all, the company controls around 82% of the search engine market in China.
Although Chinese tech stocks have taken a hit this year with new regulations, Baidu has mostly overcome these challenges.
With that in mind, Baidu’s dominant position in the industry is helping boost its bottom line. Altogether, Baidu’s revenue grew 20% in the second quarter, led by advertising revenue and its AI segment.
Additionally, the company’s majority interest in iQIYI (Nasdaq: IQ), similar to Netflix, has the potential to boost its revenue further, making it one of the best international stocks to buy.
No. 4 STMicroelectronics (NYSE: STM)
- Market Cap: 41.8B
- Country: Switzerland
- Focus: Semiconductors
- 1 Yr. Rev Growth (MRQ): 43%
The global chip shortage has worked in favor of the chip-making companies. And as one of the largest chipmakers in the world, STMicroelectronics is benefitting from the skyrocketing demand.
The company’s technology is being used in several high-growth industries such as EVs, smartphones, AI, and data storage. Not only that, but the chipmaker also does business with some of the biggest brands around, such as:
- Apple (NASDAQ: AAPL)
- HP (NYSE: HPQ)
- Tesla (NASDAQ: TSLA)
- Nintendo (OTCMKTS: NTDOY)
Furthermore, the higher demand is pushing chip prices higher, leading to higher profit margins. As a result, STM is seeing gross margins of +40% in its second quarter. Not only that, they expect it to continue into Q3, which is why many investors believe it’s one of the best international stocks to buy.
Lastly, with the demand for chips not expected to slow down anytime soon, the conditions make it favorable for STM to continue expanding.
No. 3 Shopify (NYSE: SHOP)
- Market Cap: 168.6B
- Country: Canada
- Focus: e-commerce
- 1 Yr. Rev Growth (MRQ): 56.7%
The Canadian-based company is also considered one of the best international stocks to buy based on its market share and growth.
Although the e-commerce company does have a significant U.S presence, it’s headquartered in Ottawa, Canada. With that being said, the e-commerce giant is controlling around 29% of the U.S e-commerce software market.
Not only that, but its website is number one in the U.S for businesses to use and set up shop. This is compared to Amazon (Nasdaq: AMZN), which brings the marketplace to sellers for a fee.
Considering the U.S ecommerce market expecting to grow 30% in the next four years to $563.4 billion, Shopify is in a good position to continue expanding its platform.
Keep reading to discover the best international stocks to buy this year.
No. 2 Sony (NYSE: SONY)
- Market Cap: 142.6B
- Country: Japan
- Focus: Consumer Products
- 1 Yr. Rev Growth (MRQ): 14.9%
Most of you are familiar with Sony and the incredible technology it puts out. For those who don’t, the company makes consumer favorites like smartphones, TVs, cameras, headphones, and speakers.
Furthermore, Sony’s most profitable segment, gaming, boasts its gaming device- PlayStation. On top of this, the company’s music segment is growing significantly and starting to contribute to revenue.
During the pandemic, Sony’s core business grew immensely. As people stayed home, they looked for things to keep them busy, like gaming devices, TVs, and other devices.
Sony’s momentum continued with sales growing 15% year-over-year (YOY) to $20.3 billion in its latest earnings report. The growth was led by Sony’s gaming unit (25.5%) and electronics & sensing (23.6%).
Sony’s stock is up over 45% from last year on continued momentum and growing earnings, making it one of the best international stocks to buy. But, with the chip shortage starting to cut into Sony’s profit margins, can the success continue?
Looking ahead, Sony’s growing segments should help it overcome losses related to the chip shortage. It may show in the company’s next few reports, but the company is still growing and profitable overall.
Best International Stocks – No. 1 Mercado Libre (NASDAQ: MELI)
- Market Cap: 74.5B
- Country: Argentina
- Focus: e-commerce
- 1 Yr. Rev Growth (MRQ): 93.8%
Best known for its ecommerce business, Mercado Libre is in full growth mode. Much like other e-commerce companies, MELI provides an online platform for users to buy and sell items.
However, MELI has a significant advantage in the area it’s serving. The Latin American e-commerce industry is expected to be one of the fastest-growing markets in the next few years, with analysts expecting 30% growth until 2024. The growth is significant because MELI is by far the biggest competitor in the region.
What’s more, MELI is also involved in the fintech industry. The company’s digital payments segment is also growing rapidly in a region that’s craving stability.
MELI’s Net revenue has now grown over 100% in each of the last five quarters. In spite of the company’s growth, the stock is down 8% since the start of 2021. The decline is partially due to higher inflation rates in the region, along with ongoing political tension.
As we advance, MELI looks to be one of the best international stocks to buy based on its potential growth ability.
Best International Stocks to Buy – What You Should Know
Although these are some of the best international stocks to buy, they still carry some risks you should be aware of. Things like exchange rates, political tension, and war can disrupt economies, bringing stock prices down with it.
It’s crucial to realize that investing is a risk and especially when it comes to foreign markets. But, as long as you do your due diligence and keep up with the company, you can largely avoid this issue.
On the other hand, the best international stocks also offer excellent growth potential. Companies serving undeveloped markets can sometimes experience faster growth and higher price appreciation.
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These companies are proving themselves through difficult times and exceeding expectations while at it.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.