While the yields of the usual high dividend payers have been driven down by income investors, there are many stocks still offering dividend yields greater than 12%. These stocks tend to be overlooked by most investors. You can find these stocks in an overlooked place called American Depository Receipts (ADR). These are international stocks that are also registered to trade on the U.S. stock exchanges. According to my research, there are 72 ADRs with a dividend yield greater than 5%.
How do we know these high yield stocks are worth investing in? We look at stocks with a bullish or very bullish equity summary score. The Equity Summary Score provides a consolidated view of the ratings of more than 10 independent research providers on Fidelity.com. It uses the providers' relative, historical recommendation performance along with other factors to give you an aggregate, accuracy-weighted indication of the independent research firms' stock sentiment. After looking at ADRs rated bullish or better we are down to 28 stocks with a dividend yield greater than 5%.
We found five stocks on this list with dividend yields above 12%. All of these stocks have a price/earnings ratio of 10 or less and a beta within reasonable range of the market. These stocks are value plays that pay investors high yields to wait for capital appreciation. The following paragraphs will discuss the five stocks at the top of this list.
Partner Communications Company Ltd. (PTNR, Financial) provides various telecommunications services in Israel. It offers cellular telephony services on GSM/GPRS and UMTS/HSDPA networks. PTNR sold off at the end of January 2012 due to a claim that alleges that Partner did not comply with the requirements set by the Israeli Communications Law. PTNR has traded higher than $20 in the past two years. Now, it is trading at $8.56 which is near its 52-week low. The price drop ballooned the dividend yield up to 19.45%. PTNR is still a fundamentally strong company with good growth prospects. PTNR will announce 4th quarter earnings on February 22. This is definitely a stock to watch if the allegations are worked out with the government without diminishing the cash flow for dividends.
Telecom Corporation of New Zealand Limited (NZT, Financial) provides telecommunications services in New Zealand and Australia. NZT is trading at $9.00 with a dividend yield of 14.06%. NZT has an equity summary score that is very bullish, 9.3 out of 10 points. U.S.-based shareholders sold down their stake in NZT in November 2011 ahead of the spinoff and separate listing of its infrastructure unit, Chorus Ltd. (CNU.NZ). The stock dropped from $10.60 to $7.38. Since then, NZT has rebounded to $9.00. NZT has potential upside of 11.8% based on a current price of $9.00 and analysts' consensus price target of $10.14. The stock should discover initial support at its 50-day moving average (MA) of $8.01 and subsequent support at its 200-day MA of $7.51.
Telefonica Brasil SA (VIV, Financial) provides fixed-line telecommunications services to residential and commercial customers in the state of Sao Paulo, Brazil. VIV is trading at $28.08 with a dividend yield of 12.99%. VIV has an equity summary score that is very bullish, 9.8 out of 10 points. In the past year, the stock has hit a 52-week low of $22.81 and 52-week high of $32.14. Vivo Participacoes (VIV) stock has been showing support around $27.51 and resistance in the $28.35 range. Technical indicators for the stock are Bullish.
France Telecom (FTE, Financial) provides fixed telephony and mobile telecommunications, data transmission, Internet and multimedia, and other value-added services to consumers, businesses, and telecommunications operators. FTE is trading at $14.96 with a dividend yield of 12.90%. VIV has an equity summary score that is bullish, 8.0 out of 10 points. Following the sale of its 35% stake in Orange Austria for EUR70M, we see further asset sales, with a minority stake in Portugal's Sonaecom likely to fetch around EUR100M, if sold over the next year. We think recent asset sale agreements alleviate the risk of a dividend cut, and see share buybacks funded by proceeds from the sale of Orange Switzerland. We view FTE's dividend yield as attractive.
Alto Palermo SA (APSA, Financial) engages in the ownership, acquisition, development, leasing, management, and operation of shopping centers, as well as residential and commercial complexes in Argentina. APSA is trading at $16.50 with a dividend yield of 11.76%. APSA has an equity summary score that is very bullish, 9.8 out of 10 points. The company's results are closely correlated with the performance of the economy, which has proven to be quite volatile. APSA has a high degree of concentration in the near term for its lease agreements, with approximately 38 percent of lease contracts expiring before the end of 2012. While this ratio is high for the industry, APSA's strong market position allows it to renew contracts and update leasing terms conveniently. Fitch has rated APSA’s rating listed as stable at this time. For the LTM ended of Sept. 30, APSA had USD154 million of EBITDA, an improvement from USD147 million during the fiscal year ended June 30. The improvement continues to show the positive performance of the company's shopping centers.
How do we know these high yield stocks are worth investing in? We look at stocks with a bullish or very bullish equity summary score. The Equity Summary Score provides a consolidated view of the ratings of more than 10 independent research providers on Fidelity.com. It uses the providers' relative, historical recommendation performance along with other factors to give you an aggregate, accuracy-weighted indication of the independent research firms' stock sentiment. After looking at ADRs rated bullish or better we are down to 28 stocks with a dividend yield greater than 5%.
We found five stocks on this list with dividend yields above 12%. All of these stocks have a price/earnings ratio of 10 or less and a beta within reasonable range of the market. These stocks are value plays that pay investors high yields to wait for capital appreciation. The following paragraphs will discuss the five stocks at the top of this list.
Partner Communications Company Ltd. (PTNR, Financial) provides various telecommunications services in Israel. It offers cellular telephony services on GSM/GPRS and UMTS/HSDPA networks. PTNR sold off at the end of January 2012 due to a claim that alleges that Partner did not comply with the requirements set by the Israeli Communications Law. PTNR has traded higher than $20 in the past two years. Now, it is trading at $8.56 which is near its 52-week low. The price drop ballooned the dividend yield up to 19.45%. PTNR is still a fundamentally strong company with good growth prospects. PTNR will announce 4th quarter earnings on February 22. This is definitely a stock to watch if the allegations are worked out with the government without diminishing the cash flow for dividends.
Telecom Corporation of New Zealand Limited (NZT, Financial) provides telecommunications services in New Zealand and Australia. NZT is trading at $9.00 with a dividend yield of 14.06%. NZT has an equity summary score that is very bullish, 9.3 out of 10 points. U.S.-based shareholders sold down their stake in NZT in November 2011 ahead of the spinoff and separate listing of its infrastructure unit, Chorus Ltd. (CNU.NZ). The stock dropped from $10.60 to $7.38. Since then, NZT has rebounded to $9.00. NZT has potential upside of 11.8% based on a current price of $9.00 and analysts' consensus price target of $10.14. The stock should discover initial support at its 50-day moving average (MA) of $8.01 and subsequent support at its 200-day MA of $7.51.
Telefonica Brasil SA (VIV, Financial) provides fixed-line telecommunications services to residential and commercial customers in the state of Sao Paulo, Brazil. VIV is trading at $28.08 with a dividend yield of 12.99%. VIV has an equity summary score that is very bullish, 9.8 out of 10 points. In the past year, the stock has hit a 52-week low of $22.81 and 52-week high of $32.14. Vivo Participacoes (VIV) stock has been showing support around $27.51 and resistance in the $28.35 range. Technical indicators for the stock are Bullish.
France Telecom (FTE, Financial) provides fixed telephony and mobile telecommunications, data transmission, Internet and multimedia, and other value-added services to consumers, businesses, and telecommunications operators. FTE is trading at $14.96 with a dividend yield of 12.90%. VIV has an equity summary score that is bullish, 8.0 out of 10 points. Following the sale of its 35% stake in Orange Austria for EUR70M, we see further asset sales, with a minority stake in Portugal's Sonaecom likely to fetch around EUR100M, if sold over the next year. We think recent asset sale agreements alleviate the risk of a dividend cut, and see share buybacks funded by proceeds from the sale of Orange Switzerland. We view FTE's dividend yield as attractive.
Alto Palermo SA (APSA, Financial) engages in the ownership, acquisition, development, leasing, management, and operation of shopping centers, as well as residential and commercial complexes in Argentina. APSA is trading at $16.50 with a dividend yield of 11.76%. APSA has an equity summary score that is very bullish, 9.8 out of 10 points. The company's results are closely correlated with the performance of the economy, which has proven to be quite volatile. APSA has a high degree of concentration in the near term for its lease agreements, with approximately 38 percent of lease contracts expiring before the end of 2012. While this ratio is high for the industry, APSA's strong market position allows it to renew contracts and update leasing terms conveniently. Fitch has rated APSA’s rating listed as stable at this time. For the LTM ended of Sept. 30, APSA had USD154 million of EBITDA, an improvement from USD147 million during the fiscal year ended June 30. The improvement continues to show the positive performance of the company's shopping centers.
