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2 High-Yield Opportunities No One Is Talking About


  • Many investors are married to the U.S. equity market.
  • They either invest in U.S. dividend stocks (yielding extremely low right now) or high tech growth stocks (priced at all time highs).
  • We prefer to find under-the-radar opportunities with high yield and upside potential. We offer 2 such examples below.
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For dividend investors or value investors, it’s an increasingly difficult environment to find deals as dividend stocks continue to rip higher:

However, even though the broader market is very richly valued, there always are pockets of value to be

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This article was written by

High Yield Investor profile picture

Samuel Smith is Vice President of Leonberg Capital, he has a diverse background that includes being lead analyst at several highly regarded dividend stock research firms. He is a Professional Engineer and Project Management Professional and holds a B.S. in Civil Engineering & Mathematics from the United States Military Academy at West Point and has a Masters in Engineering.

Samuel runs High Yield Investor investing group. Samuel teams up with Jussi Askola and Paul R. Drake where they focus on finding the right balance between safety, growth, yield, and value. High Yield Investor offers real-money core, retirement, and international portfolios. The services also features regular trade alert, educational content, and an active chat room of like minded investors. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ACLLF; TEF either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (22)

just-another-newbie profile picture
@High Plains Investor I have been a TEF fan. SA still shows the dividend as 15.23; other sites have it at 7.23 on up. Schwab has it at 9.68. Fidelity trader pro shows it as zero. I tried searching but didn't find my answer online -- is TEF's dividend a "special" dividend -- meaning there is no dividend commitment from TEF on paying dividends?
ATCO & BIP are my infrastructure holdings in my Canadian portfolio.
They are all held in my IRA to avoid foreign taxes.
Fidelity does give access to trading in Toronto & no trading fees.
Is there a foreign tax on TEF if held in an IRA?
High Yield Investor profile picture
@Erik2647 Yes. It is best to either hold it in a taxable account or request your dividend fully in shares. If you take the dividend fully in shares then you will not be charged a foreign withholding tax. Disclosure: I am not a tax expert and this is not tax advice. Just my personal opinion based on my own experience.
Go595lf profile picture
This is what I found in Google:

Payments made by a resident of Spain to a non-resident in respect of certain types of interest payments, rents, royalties, dividends, management or administration fees are subject to tax at the rate of 19% / 24%.
Go595lf profile picture
Agree with your points and appreciate the article. I am going to research on Telefonica (TEF), I own the stock a couple of years ago and I think that there is a foreign tax on the dividends paid.
@Go595lf lol, unless they withhold it they ain't gettin it... Note: I don't own any shares but screw that. I have enough tax docs to file.
@Go595lf There is, plus they pay the dividend only every 6 mo and can be irregular. Won't buy this for those reasons.
@High Yield Investor thanks for a article. Always good to hear about new ideas. Re ATCO: looking at their op income, net income - declining; payout ratio getting close to a 100%. Div growth and high chowder is great, but that's history. What are your thought on their ability to sustain div growth and the div all together given the decrease in earnings? In this case it looks like their div history is about to change
Dividend Pro profile picture
Have to completely disagree on ATCO.

Non-voting ACO-X.to and voting ACO-Y.to (ATCO) have both drastically UNDERPERFORMED both the slow-poke TSX60 and red-hot SPY for the last 5, 10 years.

NOTHING TO LIKE HERE. Nice dividend, but you left a LOT of money on the table by investing in these.

You actually LOST money over 5-years. Read that sentence again.
Yes, the company stock performance was stellar 20 years ago, not today. And that is what matters.

They do make nice trailers though, if you want to invest into one of those to live in.
I'd love to own ATCO (currently long BIP and other infrastructure stocks), but my broker doesn't have pink sheet stocks. I know that it is a financial and regulatory burden to list yourself on a major US exchange, but I would bet that at least some of the discount is due to that. Not only small investors avoiding pink sheets (either intentionally or unintentionally), but I would assume that some funds and maybe ETFs also avoid them.
@Chalmus0 your broker doesn't give access to trading in Toronto?
@Peder Steen Jensen Not as of yet, no. Now that almost all brokers have gone to a free trade model I might look around, but the one I use was one of the first ones to offer completely free trades, and I REALLY like their auto-balancing model and some other quirks that I haven't seen elsewhere. There are a few companies like ATCO that I am interested in owning, but so far it hasn't been compelling enough for me to want to switch brokers or open another account somewhere else in addition to my current broker.
@Chalmus0 there is also the fact that some commission-free brokerages will charge for OTC trades; I'm with TD Ameritrade, and I have to pay about $7 every time I buy or sell shares of certain Canadian companies (TransAlta Renewables and Innergex, to name two). Atco looks like one to own, but I hesitate to pay that commission since I'm a small fish opening small positions.
What is the current tax withholding on Spanish source dividends? Also, your puzzlement about ATCO vs BIP valuations would probably be solved if you first used a more appropriate peer choice such as other utility companies since that is where the overwhelming majority of their EBITDA comes from. The infrastructure business is a minority part, but a nice diversification.
Will104 profile picture

Appears to be a standard 19 percent which can be reduced under tax treaty to 5 percent for US shareholders

In practise getting the tax back from most European counties can be quite painful - so only worth doing if you’ve a material amount of tax to get back or enjoy dealing with foreign tax authorities :)
alchemist11 profile picture
TEF is a great stock that flies under the radar! I've been loading up on it.
Pablo profile picture
@alchemist11 TEF I bought a bit early. It's dogging it right now. Holding it. May buy more.
leearther profile picture
interesting write up, thx
Excellent Article and analysis. Thank you! High Yield investor has been a great source of investing for me. I appreciate the tools and information you and Sam provide.
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