Oi S.A. (
) -- Portuguese for "hi" -- is the largest telecommunications
company in Brazil, and offers the unique combination of a double
digit dividend yield with a price-to-book value of just 0.50.
That is very appealing for both income and value investing.
Through its subsidiaries, OIBR:
"...provides integrated telecommunication service for
residential customers, companies, and governmental agencies in
Brazil. The company offers fixed-line and mobile
telecommunication services; data transmission services, such as
broadband access services; Internet service provider (ISP)
services; and other services."
Like many telecommunications stocks, Oi has a strong dividend
component. As a dividend paying stock, the yield for Oi is
13.65%. By contrast, the dividend yield for AT&T (
) is just 4.70%. There is modest debt and a strong cash flow.
Both provide for a bullish future for the dividend of the
Also bullish for the future of OIBR is the future of Brazil,
many of its companies
. As one analyst wrote about the country:
Brazil is an expanding market
. The middle class is growing and in need of communication
services to meet their growth demands. South America,
specifically Brazil, has a better chance to weather a global
economic crises than does the EU or the US. They are generally
not dependent on the USD or Euro, both of which are rapidly
losing value. In the longer term, I see South America as the last
great frontier of financial opportunity."
Now trading around $13.75 a share, the mean analyst target
price for Oi over the next year of market action is $16.21. With
a beta of 1.24, OIBR is volatile, which allows you to buy on the
dips to enhance its allure as a dividend paying stock. The
52-week low is $10.86. Year to date however, Oi is up 8.75%. As
there is only a short float of 2.30% (a short float of 5% is
considered to be troubling), investors do not see Oi giving up