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Searching for a stock with both growth and income? Head to Indonesia

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In a financial epoch in which American phone giants such as AT&T ( T , quote ) and Verizon Communications ( VZ , quote ) have ossified into investments suitable only for the income component, Telkom Indonesia ( TLK , quote ) is posting strong growth numbers.

[caption align="alignright" caption="Telkom Indonesia's HQ in Jakarta"] [/caption]

And the techincals and the trends point to even more gains ahead for investors. Year to date, Telkom Indonesia is up by 11.78%. The last month has seen the stock rise by 14.11%.

Investors expect this to continue as the short float is tiny at 0.15% (a short float of 5% is considered to be troubling for a company). The trend is definitely the friend of shareholders as it is trading above its 20-day, 50-day and 200-day moving averages.

At 237.6 million people, Indonesia has the fourth-largest population in the world - and the world's most populous majority Muslim population. The country has political stability, a high consumer base, and a thriving economy driven by manufacturing, construction and tourism. There are also abundant natural resources throughout the archipelago.

The total number of global mobile subscribers will reach approximately 7 billion by 2015, about two-thirds of whom will reside in Asia - constituting the largest region for global mobile markets. That presents a tremendous opportunity for Telkom Indonesia; the company's subsidiary Telkomsel is the market leader in cellular, with more than 104 million customers.

Overall in Indonesia, more than 90% of cellular subscribers are prepaid customers. From this low revenue base many aspects of mobile communications and marketing can be added. Fixed line users in Indonesia have been growing at about 20% annually. Broadband is increasing by more than 30% yearly with 50 million in Indonesia currently using the Internet. Obviously this will only grow, with Indonesia already the third largest market for Facebook.

Telecom Indonesia is very profitable with a profit margin of 21.71%. The operating margin of 30.80% and gross margin of 72.03% are robust, too - as is the dividend income of 4.37%. Unlike AT&T and Verizon, Telekom Indonesia is both a growth and income stock.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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