Global stock markets have been quite volatile lately, especially in emerging markets. One of the key factors has been the uprisings in North Africa and the Middle East. (The Egyptian stock exchange had to be shut down.)
But there are other drivers. For example, the devastating earthquake and tsunami in Japan has had ripple effects across the globe. What’s more, there has been rising inflation in places like China, Brazil and India.
Despite all this, there are certainly opportunities for investors. Consider that some global telecom companies offer stability as well as nice dividend payouts.
So let’s take a look at the ones I like:
France Telecom (FTE) – 4.9% Dividend
France Telecom’s (NYSE: FTE) heavy footprint in Europe is a concern, especially with the debt default jitters, yet the telecom business is fairly stable. At the same time, there is much opportunity with broadband and television services.
In fact, France Telecom has operations in the Middle East and Africa. Such areas should be a nice source of long-term growth.
France Telecom also has a cheap valuation, trading at only 7.8 times earnings.
Telefonica (TEF) – 9.3% Dividend
With the possibility of default in Greece, there have been fears that the contagion will spread to Spain. Although, it looks like this scenario may not play yet.
Regardless, Spanish fixed and mobile telecom service provider Telefonica (NYSE: TEF) has a solid business. Even if the stock price treads water, you’ll still get a nice yield – which looks safe.
Moreover, Telefonica has a strong business in the United Kingdom and Germany. There are also fast-growing operations in Latin America, such as in Brazil and Mexico.
Telecom Corporation of New Zealand (NZT) – 4.9% Dividend
Telecom Corporation of New Zealand (NYSE: NZT) is the largest telecom provider in New Zealand, with a substantial base of business and consumer customers.
As should be no surprise, the growth will come from broadband and wireless while the fixed-line business will continue to deteriorate. In fact, the penetration rate of smartphones is relatively small.
However, investors should be a bit cautious. The New Zealand government may not necessarily select Telecom Corporation of New Zealand as a partner for its broadband network. If the company loses out, so could the stock.
Philippine Long Distance Telephone (PHI) – 5% Dividend
Philippine Long Distance Telephone (NYSE: PHI) is the dominant fixed-line and mobile player in the Philippines. There are not many shares on the open market because the company has large equity holders like Nippon Telegraph.
Like all telecoms, PHI is facing more competition lately. But the company’s scale should help it to continue to grow its profitability and cash flows. For example, it purchased rival Digitel, which should be a nice boost.
Portugal Telecom (PT) – 9.5% Dividend
The fiscal situation is dicey in Portugal, however, Portugal Telecom (NYSE: PT) has a solid business, which should be able to deal with tough economic conditions. The company has a massive fiber network, which provides services such as television. This should be a good source of growth.
Finally, Portugal Telecom snagged a hefty $9.9 billion from its sale of its stake in Vivo, which is the biggest mobile provider in Brazil.