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Oil sector stocks in the United States generally pay lower yields when compared to their foreign counterparts. For example, Exxon (NYSE:XOM) yields about 2.6%, and Chevron (NYSE:CVX) yields about 3.2%. Whereas, British oil giant BP p.l.c. (NYSE:BP), yields about 4.5%, and the largest oil company in France, Total (NYSE:TOT), yields around 4.8%. With European stock valuations trading at depressed levels, it is possible to buy some dividend bargains and that is why it makes sense for U.S.-based investors to consider foreign stocks.

One stock that looks particularly attractive right now is Prosafe (OTCPK:PRSEY). This company owns and operates 11 semisubmersible rigs that are used as accommodations and extra space for workers stationed at deep-sea oil-drilling rigs. These units are also called floating hotels or "floatels" and they are connected to the oil rig by a gangway. This company is based in Europe, but it operates all over the world. It contracts its fleet with some of the world's largest oil companies. For example, ConocoPhillips (NYSE:COP) has utilized the "Safe Scandinavia" rig at Eldfisk in Norway since April. It has also done business with BP in the North Sea, and Petrobras (NYSE:PBR) in Brazil. Here are a few reasons to consider the stock:

1. The company recently announced solid financial results and a quarterly dividend payment. For the second quarter of 2012, it earned a net profit of $35.9 million. The utilization of the rig fleet was 78%.

2. Prosafe shares offer a dividend yield that will beat most oil sector stocks. The current dividend rate puts the yield at nearly 8%. The company recently declared an interim dividend of 13.3 cents per share to shareholders of record as of September 3, 2012.

3. Prosafe's floating hotels are often required when major maintenance or upgrades are required. Since a number of major deepwater oil rig companies like Transocean (NYSE:RIG) have older fleets, the future growth potential for Prosafe looks promising. After the oil spill in the Gulf of Mexico, many companies have learned it is cheaper to perform preventative maintenance, rather than risk safety issues.

4. A recent Barron's article cites that some analysts see up to 55% upside for the stock. That seems reasonable since the stock currently trades for about 8 times 2012 earnings estimates and for just 8 times estimates for 2013. Plus, while waiting for a higher share price, investors get to collect yields of nearly 8%. This stock has jumped from about $7 to nearly $8 in recent trading, so it might be smart to wait for a pullback before buying.

Key Data Points For Prosafe From Yahoo Finance:
Current Share Price: $7.80
52-Week Range: $6.22 to $8.38
Dividend: about 55 cents which yields almost 8%
2012 Earnings Estimate: 88 cents per share
2013 Earnings Estimate: $1.18 per share
P/E Ratio: about 8 times earnings

Data is sourced from Yahoo Finance. No guarantees or representations are made. Please consult a financial advisor before making investments.

Disclosure: I am long BP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: A $7 Oil Services Stock That Yields 8% And Offers 55% Upside Potential