With all the focus that has been given to Europe, China and even the Gulf of Mexico in recent months, it seems that many investors have ignored Latin America. However, Latin America stocks can offer investors both tremendous yield opportunities as well as attractive valuations.
We have put together this list of 4 cheap Latin America dividend stocks that offer dividend yields above 3%, but are trading at less than 10X forward EPS.
- Banco Latinoamericano de Comercio Exterior (NYSE:BLX)
This small-cap, financial stock offers investors a 4.9% dividend yield. Analysts expect the Panama bank to grow earnings by 18% next year. However, BLX only trades at 7x 2011 EPS and is near its 52-week low.
- Telecom Argentina S.A. (NYSE:TEO)
While TEO doesn’t offer quite as high of yield as American telcom’s like Verizon (NYSE:VZ) or AT&T (NYSE:T), the stock does offer a 5.1% dividend yield. In addition, analysts expect the company to grow revenues by 8% this year, which is not bad for a stock trading below 7x 2011 EPS estimates.
- Companhia Siderurgica Nacional (NYSE:SID)
SID is a Brazilian steel producer that offers income investors an impressive 7.4% dividend yield. The stock trades at an amazingly cheap 8x 2011 EPS, despite analyst expectations for SID to grow revenues by 34% this year and 25% in 2011. Deutsche Bank and Goldman Sachs both lowered their rating for SID earlier this year, but at the same time increased their price target; go figure.
- Telefonos de Mexico, S.A.B. de C.V. (NYSE:TMX)
While Verizon and AT&T trade at multiples of 10-12x 2011 EPS, this Mexican telcom stock is trading at only a 9x multiple. TMX also provides investors a 5.4% dividend yield and is trading well below its 52-week high of $19.
Of course there are inherent risks associated with investing in foreign stocks and especially those in emerging markets like Latin America. However, dividend investors can often capitalize on higher yields by exploring foreign dividend stocks.
Disclosure: No positions