3 Undervalued Foreign High Dividend Stocks

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 |  Includes: HKTV, SPIL, TEO
by: Double Dividend Stocks

If you're looking for undervalued foreign dividend stocks with good growth prospects, our latest screen might interest you. We screened for attractive valuation metrics, such as, low Price/Free Cash Flow and PEG ratios, and high future EPS. We also screened for attractive ROE, ROI, ROA ratios, dividend stocks with a dividend yield above 5%, and low debt. This screen returned 2 Asian dividend paying stocks and 1 Latin American Telecom dividend stock, all of which are now in our High Dividend Stocks by Sector tables:

· City Telecom HK (CTEL): Provides integrated telecommunications services in Hong Kong via its own self-built fiber network. CTEL has a subsidiary, Hong Kong Broadband Network Limited (HKBN), that’s the fastest growing broadband service provider in Hong Kong. HKBN offers a diversified portfolio of innovative products that service over 1,027,000 subscriptions for broadband, local telephony and IP-TV services. CTEL also has branch offices in Canada and Guangzhou. (Source: CTEL website)

· Telecom Argentina (NYSE:TEO): Based in Buenos Aires, TEO provides voice, data, internet, and wireless services to residential and corporate customers in Argentina. For the three months ended 31 March 2010, TEO's revenues increased 15% to P$3.25B. Net income increased 17% to P$411M. Revenues reflect an increase in revenue from Voice, Data & Internet segment and a rise in revenue from Mobile Telephony segment. Net income also reflects a decrease in amortization expenses, a fall in settlement charges, a decrease in bad debt expenses and higher gross profit margin.

· Silicon Precision Industries (NASDAQ:SPIL): Established in May 1984, SPIL has become one of the leading providers of comprehensive semiconductor assembly and test services. SPIL posted annual sales of US$1.81 billion in 2009 and currently employs around 17,000 people worldwide. Products include advanced lead-frame and substrate based packages, which are widely used in, but not limited to, personal computers, communications, internet appliances, cellular phones, digital cameras, cable modems, personal digital assistants and LCD monitors. Also based in Taiwan, with offices in China, Japan, Germany, and throughout the US. (Source: SPIL website)

All 3 firms have attractive Valuation metrics vs. the S&P500:

P/E

PEG

EPS Growth Next 5 Years

Price/Free Cash Flow/Share

Price/Book

Price/Sales

SPIL

10.56

.53

20%

9.62

1.66

1.67

CTEL

11.16

.59

19%

5.70

2.25

1.82

TEO

9.41

.93

10%

7.89

2.40

1.11

S&P500 Avg

18.74

NA

NA

20.40

3.35

2.27

Click to enlarge

Here are their Financial Ratios vs. the S&P500:

Dividend Yield

ROE

ROA

ROI

DEBT

SPIL

15.18%

16.14%

13.18%

15.84%

NO DEBT

CTEL

5.47%

21.52%

13.03%

15.81%

0.13

TEO

4.98%

29.17%

14.30%

23.81%

0.15

S&P500 Avg

2.52%

18.68%

8.07%

10.01%

0.75

Click to enlarge

SPIL paid an annual dividend of $.401/share in July. Their most recent ex-dividend date was July 12, 2010.

CTEL pays semi-annual dividends in July and Dec-Jan.; their next ex-dividend date should be in early December. (They paid $0.413/share in Dec. 2009).

TEO paid an annual dividend of $.90 in May. Their most recent ex-date was April 30, 2010, which was their first dividend since 2001.

There are put options and call options available on CTEL and SPIL, but the yields on CTEL covered calls and cash secured puts are vastly superior. Based upon today’s stock and option prices, CTEL currently sits atop our Covered Call Table, with an annualized static yield of over 45%.

CTEL also currently offers a very juicy cash secured put yield of over 32% annualized, currently the highest yield in our Cash Secured Put Table.

Disclosure: No positions at this time.