Exotic Telecoms With Dividend Appeal

Posted: Sep 03, 2009 09:36 AM by Aryeh Katz
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Tickers in this Article: SNE, DT, CHT, OTE, MTA

Travel the world and you'll see from nearly every perspective, well-managed telecoms are the best stocks available on local exchanges. The bigger ones often come to the U.S. for financing, and that means a greater number of investment opportunities for income-seeking investors in ADRs. But the big European and Asian names aren't the only belles at the ball. Here, we highlight a number of telecommunication companies from offbeat locales that yield plenty, and have some solid fundamentals to vouch for them.

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Hungry for Income
Our first stop is Hungary, where Budapest-based Magyar Telekom Plc. (NYSE:MTA) boasts an annual yield of 8.8% and trades with a trailing P/E multiple of just 9.5. Shares of Magyar Telkom have already jumped tremendously this year, rising over 100% from lows set in March. The company recently attempted to acquire competitor, ViDaNet, but was turned down by regulators who judged that MTA would then possess a monopoly on the landline and cable television markets where ViDaNet operated.

In separate news, Magyar Telekom recently announced its intention to launch its own TV channels, the content of which will also be used on its websites, cable and wireless services. 

Olympian Yields 
While they haven't experienced the same explosive share growth as their Hungarian colleagues, Hellenic Telecom Organization S.A. (NYSE:OTE) does pay a very attractive 6.8% annual yield and just recently received a vote of confidence from global telecom giant, Deutsche Telekom AG (NYSE:DT), which upped its stake in the Greek concern to a full 30% (from 25%) of the company's outstanding common shares.

Earlier this summer, Hellenic Telecom, through a subsidiary, acquired licenses to significantly expand its operations in Romania. The shares trade with a multiple of 9.2x last year's earnings.  

Dividends East and West 
Chunghwa Telecom Co., Ltd. (NYSE:CHT) is Taiwan's principal telecom service provider, with separate fixed line, mobile, internet and data divisions. The shares yield 6.1% annually and trade with a P/E of 12.1.In what could be seen as a significant move politically - if not business-wise - the company recently announced a one million dollar investment in a network service company based in mainland China.

Chunghwa has also signed a deal to market Sony (NYSE:SNE) products in Taiwan - the first time the Japanese manufacturer has teamed with a Taiwan-based carrier on such a deal.

The Wrap
Off the beaten track, there are telecoms doing some very heavy lifting for investors. The above three outfits pay very handsome dividends to income-seekers. Even though they're not the biggest names in the industry, they have more to offer than many. (For more, read Dial Up Choice Telecom Stocks.)

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