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Ideas for Income Investors. High Dividend Stocks, Mutual Funds etc.
Top International Dividend Stocks - European Telecom
Posted by: Intelligent Speculator (IP Logged)
Date: May 23, 2012 08:04AM
For several months now, I have been able to put together lists of top international stocks mostly sorting them in terms of dividend yields. We did take a deeper look at some of those names in greater detail such as Vodafone (VOD) while also adding a stock with great international exposure in Aflac (AFL) to both the Ultimate Sustainable Dividend Portfolio and one of the 4 stocks that I picked in this year’s stock stock picking competition. I’ve written about a critical aspect of dividend investing in the past which are more critical than ever when looking at international dividend stocks:
-looking beyond dividend yield
If you take a deeper look at the top dividend yields for international stocks you will see a very strong trend for European stocks that are coming out near the top of those rankings. That is a group of stocks that I am personally very prudent before buying. Why? Mainly these reasons:
European Chaos:-Europe seems to be nearing a cliff in many different ways with Greece and other nations in serious trouble. One of the big results has been a very difficult time for companies operating there, especially banks located in countries such as Greece and Spain. Citizens in those countries have been increasingly worried about what will happen and continued to move their assets to foreign banks, especially in Germany. Thus, I would not be buying dividend stocks of such banks even if they offer great dividend yields.
European Telecoms:-While there are also many concerns about many of these companies which have been at the top of previous international rankings but also US ones (with FTR at the very top), many of these companies pay high dividends that are unfortunately not sustainable. I think it’s critical to consider the long term perspectives for these companies before starting to buy them, as I had done when looking into Vodafone (VOD).
When It’s Too Good To Be True…Look at the rankings and you will see the very top dominated by YPF SA, an Argentina-based oil company which is stuck in the middle of huge changes. It remains unclear how the company will be able to keep operating on a private basis and pay reliable, sustainable dividends. Why? The Argentinian government is actually taking over the company. How will it impact shareholders? That remains to be seen. You can see some posts about it on Marketwatch for example. Personally I’m staying away:)
As you can see, there are no miracle, 10% or 15% dividend yield stocks but there are several other high quality candidates, which you can see here:
Stocks Discussed: VOD, TEF, CTEL, FTE, TI,