5-Star Stocks Poised to Pop: Telefonica
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Spanish telecom giant Telefonica (NYS: TEF) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Telefonica's business and see what CAPS investors are saying about the stock right now.
Telefonica facts
Headquarters (Founded) | Madrid (1924) |
Market Cap | $95.1 billion |
Industry | Integrated telecom services |
Trailing-12-Month Revenue | $91.42 billion |
Management | CEO Cesar Izuel (since 2000) CFO Santiago Valbuena (since 2002) |
Return on Equity (Average, Past 3 Years) | 39.7% |
Cash/Debt | $7.4 billion / $85.3 billion |
Dividend Yield | 9.4% |
Competitors | America Movil (NYS: AMX) Vodafone (NAS: VOD) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 807 members who have rated Telefonica believe the stock will outperform the S&P 500 going forward. These bulls include TrickyFerret78 and All-Star tenmiles, who is ranked in the top 0.05% of our community.
Late last month, TrickyFerret78 succinctly summed up the Telefonica bull case:
Emerging markets, great dividend, low PE, close proximity to EU issues (which I think drags down the stock to our advantage). ... Downside is a lot of debt/leverage. A safe dividend more than makes up for it.
Currently, Telefonica even sports a paltry P/E of 7. That represents a clear discount to other telecom giants like America Movil (15), Vodafone (11), and Verizon (NYS: VZ) (16).
CAPS All-Star tenmiles elaborates on the bargain opportunity:
TEF looks attractive to me ... after recent pullback in part related to the euro debt crisis. Ninety year old company, 100B market cap with dividend yield in excess of 7% (have to pay foreign tax on part if US investor). Company investing heavily in more rapidly growing Latin American regions -- announced 1.5B new investment in Peru. Dividend has seen annual increases for last five years -- likely total return market beater from these levels for those holding over next several years.
What do you think about Telefonica, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to track Telefonica?Add it to your watchlist.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Telefonica. Motley Fool newsletter services have recommended buying shares of Vodafone. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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