Because the American Depositary Receipts trade thinly, be sure to enter a limit order specifying the maximum price you’re willing to pay. To capture the 2011 dividend, payable in early June, you’ll need to purchase the stock before May 20.
Dividend Stock to Buy #2 Cellcom Israel (CEL)
Cellcom Israel (NYSE: CEL), Israel’s largest wireless carrier, just declared its first quarterly dividend for 2011 — the equivalent of 85.7 U.S. cents per share. Annualized, that works out to a super-sweet yield of 11%.
CEL hands over virtually all its profits to shareholders in the form of dividends, so there’s a chance the company may have to trim the payout in future quarters if business hits a speed bump.
On the other hand, this “pay it all out” policy (similar to the approach taken by most U.S. master limited partnerships) imposes rigorous capital allocation discipline on management. Cellcom execs, in short, don’t waste money.
Dividend Stock to Buy #3 Telkom Indonesia (TLK)
The mantra here is “free cash flow.” In recent years, Telkom Indonesia (NYSE: TLK) poured huge sums into upgrading both its wireless and wireline networks. Now the company has the luxury of throttling back a bit.
Result: Starting in 2011, each sales dollar (rupiah, actually) will generate more profit, along with a surge of cash that can be distributed to shareholders.
I predict, in fact, that Indonesia’s largest telco will boost its dividend more than 30% by 2013 (from a 2010 base). That’s the kind of growth you want in retirement.
The current yield, based on my estimate of 2011 dividends, is 4.8%.