AT&T (T) and Verizon (VZ) are popular because of stable business models as well as strong cash flows. They also pay one of the highest dividends within the capital market. Don’t believe that this alone transforms them into attractive investments. Many telecoms that provide service overseas have been caught up in the euro zone debacle and other local issues that have sent their shares sharply downward, offsetting any income potential.
I screened foreign telecom services stocks with a dividend yield of more than 5 percent that were oversold by investors. Such stocks have a negative year-to-date performance of at least 15 percent but they still have a buy or better recommendation by brokerage firms. Here are the results sorted by dividend yield:
1. Telefonica (TEF)
2. Portugal Telecom (PT)
3. France Telecom (FTE)
4. Telecom Argentina (TEO)
5. KT Corporation (KT)
Source: Seeking Alpha
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I have owned both T and VZ for a couple of years now and am quite pleased with the steady dividends they pay out. I'd been looking closely at Telefonica because its really a play on Lat-Am growth and I believe sports a dividend of around 8%. However given the issues with the Euro, TEF is just too risk to own right now.
No Telecom Indonesia? TLK with over 7% yield and a very potential growth market!!
Luckily for TEF Latin American countries don't have the euro. But realistically speaking I just can't see the euro breaking.. And I live in a triple-A euro country