Many financial experts recommend investing approximately 20% of your holdings internationally. International telecom stocks have the benefit of adding geographical diversification to your portfolio and oftentimes providing income in the form of dividends. This passive income can create huge returns for you as an investor as well as providing stability. Below are three international telecom stocks to consider adding to your portfolio.
1. Vodafone (VOD)
Vodafone is one of the largest telecom providers in the world. Not only does this British company (ticker VOD) pay a dividend of 6% at the time of this article being written, but it offers geographic diversification in Europe, the US, and emerging markets. It is the world’s second-largest provider based on the number of customers giving the company the advantage of scale. Two significant parts of its operations are in India and the US. In India it has more than 100 million customers and in the US it owns 45% of Verizon through a joint-venture. This mix of developed and developing economies may give your portfolio the advantage of growth and stability.
2. Chunghwa Telecom (CHT)
Chunghwa is the largest telecom in Taiwan. Taiwan is a major Asian economy experiencing growth. It is considered to be one of the Four Asian Tigers (Asian economies known for their robust growth) and this national growth could mean growth for Chunghwa Telecom. The company yields approximately 5.8% at the time of this posting, providing your portfolio with a nice stream of passive income.
3. France Telecom (FTE)
France Telecom is based in you guessed it, France. The company gives you major exposure to developed nations in Europe as well as developing countries around the world, through its main brand, Orange. An often overlooked area of the world where FTE dominates is Africa. The company has 20 million customers in Egypt alone. It also has significant operations in Eastern Europe, another developing area of the world. While the company’s earnings have been falling, customers have been growing in some of its markets, which could provide opportunities in the future. Currently the stock yields more than 17%. While this may not be sustainable without earnings growth, the telecom may be poised for success.
Full disclosure: I have no positions in the above companies and have not intention of starting one within the next 72 business hours. Always consult with a financial professional before making any investment decisions. The above article is just an opinion.