One of the most persistent myths in investing is that you have to choose between growth and income.

If you want strong earnings expansion, the conventional wisdom says you buy companies that reinvest every dollar and pay little or no dividend. If you want income, you settle for slower-growing businesses that distribute most of their profits.

That framework may apply in parts of the U.S. market.

But once you step outside the United States, the picture changes in a very interesting way.

Some of the most compelling opportunities globally are companies that combine three characteristics investors rarely see together domestically:

  • Strong earnings growth
  • Meaningful dividend income
  • Consistently high returns on equity

Even more interesting, many of these businesses remain largely invisible to U.S. investors due to a powerful behavioral bias: home-field bias.

The Opportunity U.S. Investors Overlook

Home-field bias is simple. Investors overwhelmingly prefer companies headquartered in their own country.

U.S. investors are particularly prone to this. Despite representing only part of the global economy, most American portfolios are dominated by domestic stocks.

That leaves thousands of well-run businesses around the world operating far outside the typical investor's field of view.

And in many cases, those businesses have financial characteristics that value investors actively seek.

One of the most important is return on equity.

Why High ROE Changes Everything

Return on equity measures how effectively a company turns shareholder capital into profits.

Businesses that consistently generate high ROE tend to have durable competitive advantages:

  • Strong brands
  • Efficient operations
  • Scalable distribution
  • Structural positioning within their industry

The result is simple: these companies generate significant profits relative to the capital required to run the business.

That matters enormously over time.

High-ROE businesses compound value efficiently. Every dollar retained produces strong incremental earnings. When management pairs that with disciplined capital allocation, investors benefit in two ways:

  • Earnings continue to grow
  • Cash is returned through dividends

This is where global markets diverge meaningfully from the typical U.S. growth model.

In the United States, growth companies often reinvest aggressively and delay dividends until growth slows.

In many parts of Europe, Latin America, and Asia, companies are expected to share profits even during expansion.

It is not unusual to find companies growing earnings at healthy rates while paying dividend yields in the 4% to 6% range.

When those same companies generate returns on equity of 15%, 20%, or higher, the combination becomes extremely powerful.

The Compounding Advantage

Think about what that means for long-term returns:

  • Earnings compound at attractive rates
  • Investors collect meaningful income along the way
  • Valuations are often lower than U.S. peers

That valuation gap exists largely because U.S. investors simply are not paying attention.

Financial media reinforces the bias. The daily conversation is dominated by a small group of domestic mega-cap companies. Meanwhile, hundreds of profitable global businesses continue growing, expanding, and returning capital without attracting much attention.

For investors willing to look internationally, this creates a deep and underexplored opportunity set.

These companies often operate in industries tied to long-term global growth:

  • Financial platforms serving expanding middle classes
  • Industrial and infrastructure businesses
  • Technology-enabled service providers
  • Consumer companies with regional dominance

They reinvest enough to grow while maintaining dividend policies that reward shareholders.

The result is a rare combination of growth, income, and capital efficiency.

Under the Radar Global Compounders

Itaú Unibanco Holding S.A. – (NYSE:ITUB)

Itaú Unibanco is the dominant private-sector bank in Brazil and one of the most profitable financial institutions in emerging markets.

The bank benefits from a large and growing consumer credit market, a strong retail and commercial banking franchise, and continued expansion in digital banking.

What stands out is the combination of profitability and income:

  • ~22% return on equity
  • ~6.6% dividend yield

That is an exceptional profile for a large financial institution.

Itaú represents exactly the type of high-quality foreign bank that remains under-owned by U.S. investors despite delivering strong earnings and consistent shareholder returns.

XP Inc. – (NASDAQ:XP)

XP Inc. is one of the fastest-growing financial platforms in Latin America.

The company operates a digital brokerage and wealth ecosystem offering investment products, advisory services, banking, and retirement solutions. As Brazilian investors shift away from traditional bank deposits toward capital markets, XP sits directly in the path of that structural change.

The business model is highly scalable:

  • ~24.6% return on equity
  • ~5.3% dividend yield

That is an unusually strong combination for a fintech-style platform.

XP blends high growth with meaningful income, a pairing rarely seen in U.S. technology-driven financial businesses.

Copa Holdings S.A. – (NYSE:CPA)

Copa Holdings operates one of the most efficient airline networks in the Western Hemisphere.

Based in Panama, the company benefits from its strategic "Hub of the Americas," allowing it to connect passengers efficiently across North, Central, and South America.

Airlines are typically capital-intensive and volatile. Copa is different.

  • ~26% return on equity
  • ~5.4% dividend yield

That level of profitability reflects disciplined cost control, strong route management, and high aircraft utilization.

Copa offers exposure to global travel growth while maintaining a level of capital efficiency rarely seen in the airline industry.

Kaspi.kz JSC – (NASDAQ:KSPI)

Kaspi.kz is one of the most impressive fintech ecosystems to emerge from emerging markets.

Based in Kazakhstan, the company integrates payments, e-commerce, consumer lending, and financial services into a single platform used by millions of consumers and merchants.

The model creates powerful network effects and strong customer engagement.

The financial profile is exceptional:

  • 50%+ return on equity
  • ~5.3% dividend yield

Kaspi demonstrates how profitable a scaled digital financial ecosystem can become.

Despite that, it remains largely overlooked by U.S. investors.

Betterware de México – (NYSE:BWMX)

Betterware de México is a fast-growing consumer products and direct-to-consumer distribution company focused on home organization and household goods.

The company operates through a network of independent distributors and digital channels, creating a highly efficient, asset-light model.

That efficiency shows up clearly in the numbers:

  • 80%+ return on equity
  • ~6.8% dividend yield

Few companies globally combine that level of capital efficiency with meaningful income.

Betterware represents one of the more compelling high-yield growth stories in international markets.

The Under the Radar Takeaway

The idea that investors must choose between growth and income is largely a product of how the U.S. market is structured.

Globally, that trade-off often does not exist.

There is an entire universe of companies generating:

  • High returns on equity
  • Strong earnings growth
  • Meaningful dividend income

Yet because of home-field bias, many of these businesses remain under-owned and under-analyzed by U.S. investors.

For patient investors willing to look beyond domestic markets, this creates a powerful opportunity.

Growth compounds value.
Dividends provide income.
High returns on capital drive long-term efficiency.

When those three factors come together, the results can be very compelling over time.

And more often than not, those opportunities are found exactly where most investors are not looking.