Dividend Stocks to Buy Now: Telefonica (TEF)
TEF Dividend Yield: 6%
Next on the list of dividend stocks to buy now is Spanish telecom giant Telefonica (TEF), which is down about 10% from its October highs. And while 10% might not quality Telefonica for our list of “battered” dividend stocks, consider that the stock is down 40% or so from its old 2010 high.
It’s been a rough couple of years for Telefonica stock holders. The company spent much of the 2000s building a telecom empire in Latin America, which was an excellent investment that will continue to benefit the company for decades to come. But the buying spree left TEF highly indebted and at risk to the whims of the capital markets. When the Eurozone debt crisis reached a fevered pitch in 2012, the company considered it prudent to temporarily eliminate its dividend and focus instead on paying down its debts.
Telefonica had the misfortune of being domiciled in Spain, at the heart of the Eurozone crisis. But with the worst of the crisis now passed, management has reinstated the dividend and the stock now yields 6%.
As Spain recovers from its worst crisis in decades, TEF stock should enjoy a nice rally. I expect total returns of over 100% in the next 12-24 months.