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The Russian market has had a wild ride over the last nine months. After crashing late last year, the market measured by the Market Vectors Russia ETF (NYSEARCA:RSX) has popped up smartly and just crossed its 200 day moving average (See Chart).

Given the Russia market's low valuations when compared to other BRIC countries, I think this rally could continue.

1. Although the election of Putin does not warm my heart, it should provide more stability and I would expect him to offer some free market and political reforms as concessions to the protest movement.

2. The continued high prices for oil and commodities provide a massive tailwind behind the Russian economy. It also should benefit greatly from feeding China's growth.

3. Winning admission to the WTO should add 1% annually to its GDP.

Given this positive backdrop which should buoy consumer spending in the country, here are two high yielding telecom stocks that should benefit and look good at present valuations.

VimpelCom (NASDAQ:VIP) - "VimpelCom Ltd. operates as an integrated telecommunications services provider, offering voice and data services through a range of wireless, fixed, and broadband technologies. It provides its services under the Beeline, Kyivstar, djuice, Wind, Infostrada Mobilink, Leo, Banglalink, Telecel, Mobinil, koryolink, Allo, and Djezzy brands." (Business Description from Yahoo Finance).

4 reasons VIP is a buy at $12 a share.
 

  • The stock yields a robust 6.4% based on last year's dividends.
  • The stock is selling at 10 times forward earnings a low five year projected PEG (1.11) given its dividend.
  • The stock looks like it has recently bottomed, is gaining technical strength and just crossed over its 200 day moving average (See Chart)

  • The stock is selling for around 4 times operating cash flow and analysts expect 7% revenue growth in 2012.

Mobile TeleSystems (NYSE:MBT) - "Mobile TeleSystems OJSC, together with its subsidiaries, provides telecommunications services primarily in the Russian Federation, Ukraine, Uzbekistan, Turkmenistan, Armenia, and Belarus. The company provides a range of mobile and fixed line voice and data telecommunications services, including transmission, broadband, pay-TV, and various value-added services; and sells equipment and accessories" (Business Description from Yahoo Finance).

4 reasons MBT has value at $18 a share.
 

  • It yields a solid 5.7%. It is selling near the bottom of its five year valuation ranged based on P/S and P/CF.
  • It also sells at just 5 times operating cash flow which bodes well for future dividend increases.
  • The company has a forward PE of 11, very reasonable given its growth prospects and generous dividend yield.
  • The technicals look positive and the stock recently crossed over its 200 day moving average (See Chart)
Source: Say 'Da' To These 2 Russian High Yielders