O'Shaughnessy buys 3 global dividend stocks

Published Tue, Nov 3 20156:00 AM ESTUpdated Sat, Oct 14 201710:44 AM EDT

Jim O'Shaughnessy, member of the "Squawk Box" Portfolio Challenge , is recommending international stocks with good dividends. The chairman and CEO of O'Shaughnessy Asset Management is a quantitative stock picker and uses his firm's historical data set of more than half a century to set his analysis apart. O'Shaughnessy's investment strategy is to buy quality companies with superior valuation, momentum and yield. He then waits for short-term market gyrations to give him attractive entry points. Here are his three favorite ideas right now... O'Shaughnessy is replacing his previous positions in Swiss Re , BP and Telstra with GlaxoSmithKline , Dow Chemical and CNOOC . Read More Give thanks for these perennial year-end winners "These three stocks come from a global high-dividend yield portfolio we manage. We think U.S. investors should go for a more global high-dividend portfolio because you can get cheaper stocks with higher dividend yields outside the U.S.," O'Shaughnessy wrote in an email. He added, "We think that U.S. investors should diversify their portfolios by increasing allocations to foreign markets and, for the longer-term oriented investor, emerging markets." On GlaxoSmithKline, O'Shaughnessy appreciates how the company beat earnings estimates by 19 percent, driven by cost controls. The early flu season is helping Glaxo's vaccine business and the stock is trading at its lowest price-earnings ratio in 10 years. GlaxoSmithKline has a P/E ratio of 7 and a dividend yield of 5.7 percent. Regarding Dow Chemical, O'Shaughnessy likes the increasing profit margin and believes it will continue to direct more profit to shareholders with dividends and stock buybacks. "(Dow Chemical) has paid a dividend every quarter since 1912 and has increased the dividend consistently since 2009," noted the investor. Dow Chemical has a P/E ratio of 12 and a dividend yield of 3.6 percent. Lastly, O'Shaughnessy thinks CNOOC will continue to cut its capital expenditures to help its balance sheet. He likes how the stock has outperformed the Hang Seng index in the past month with a 17 percent return versus the market's 11 percent. Read More Santoli: October's market rally settled nothing CNOOC has a P/E ratio of 12 and a dividend yield of 5.8 percent. CNBC Pro subscribers can access more investment ideas from all the "Squawk Box" Platinum Portfolio contributors by clicking here . Disclaimer

A GlaxoSmithKline logo sits on a sign outside the company's headquarters in London.

Simon Dawson | Bloomberg | Getty Images

Jim O'Shaughnessy, member of the "Squawk Box" Portfolio Challenge, is recommending international stocks with good dividends.

The chairman and CEO of O'Shaughnessy Asset Management is a quantitative stock picker and uses his firm's historical data set of more than half a century to set his analysis apart.

O'Shaughnessy's investment strategy is to buy quality companies with superior valuation, momentum and yield. He then waits for short-term market gyrations to give him attractive entry points.

Here are his three favorite ideas right now...

O'Shaughnessy buys 3 global dividend stocks

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