International Dividend Stocks: Telefonica Brasil (VIV)
Dividend Yield: Variable
When I ask my friends in the international investment community what the next three big countries are for investment and growth, they are unanimous: Costa Rica, Colombia and Brazil.
The GDP of Brazil represents about 4% of the world’s GDP. The trend for GDP is heading modestly upward at the moment after soaring up through 2008. I think this growth is going to return. The unemployment rate just dropped to a record low in December to 4.3%.
But setting aside GDP, Brazil’s telecommunications infrastructure was privatized in the 1990s and it was a mess. Investment in the sector continues to pour in. Mobile penetration is strong at 132% but service is spotty. All this means is growth until Brazil catches up with the rest of the world.
Telefonica Brasil (VIV) is one of the big four plays in Brazil, and VIV stock has more cash than debt and is significantly FCF positive.
The yield is a sticky wicket, if only because the company pays them so inconsistently. However, based on 2013’s total payouts, the stock current yields north of 8%. Even if you’re conservatively estimating to get half that yield this year, you’re still in good shape.