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Brazil Stocks Offer Alternative to EU - views
SAN FRANCISCO (Stockerblog) -- Last week, rating agency Standard & Poor's, downgraded the credit ratings for nine countries, France, Austria, Italy, Portugal, Spain, Cyprus, Malta, Slovakia and Slovenia. Yet just a couple months ago, S&P raised Brazil's foreign currency rating with little fanfare. According to John Chambers, S&P Managing Director Sovereign Ratings, "the upgrade of Brazil was supported by the current administration's growing track record of prudent macroeconomic policies, including fairly consistent primary surpluses of close to 3% of GDP."
From an economic standpoint, Brazil is the seventh largest country in the world based on GDP. The country is the world leader in renewable source energy, especially ethanol that it generates from sugarcane.
Fortunately for investors, there are plenty of Brazilian stocks that trade on the New York Stock Exchange and Nasdaq. Based on the free list of Brazil stocks at WallStreetNewsNetwork.com, 25 Brazilian stocks are available to U.S. investors and almost all of them pay dividends.
One example is Braskem S.A. (BAK), the largest chemical company in South America. It makes and markets petrochemical and thermoplastic products. The stock trades at 15 times forward earnings and sports a very generous yield of 7.0%. Revenue for the latest reported quarter was up over 15%.
In the area of beverages, Companhia de Bebidas das Americas (ABV), also known as Ambev, makes and sells beer, soft drinks, malt, and other non-alcoholic and non-carbonated products. The stock has a forward price to earnings ratio of 20, and a yield of 4.3%. Revenue was up 6.6% for the latest quarter, although earnings were down 7%.
Gerdau S.A. (GGB), founded in 1901, manufactures and markets steel products. The stock trades at eight times forward earnings and offers investors a 2.9% yield. Latest quarter revenues were up 9.5%, with earnings up 31.9%.
Telefonica Brasil, S.A. ADS (VIV) is a fixed-line telecommunications company with a forward P/E of 10, a yield of 1.4%. Quarterly earnings were up 105% on a 108% rise in revenue.
At the time of publication, author had no positions in stocks mentioned.
Fred Fuld III, the publisher of stock and bond investing blog Stockerblog and founder of WallStreetNewsNetwork, has been in the financial services industry for over 20 years, working as an investment advisor, options market maker at the Pacific Stock Exchange, vice president of a San Francisco money management firm, university faculty member and wholesaler for the New Alternatives Fund (the first environmentally conscious mutual fund). He is the author of the books Investing in Brazil Stocks and The Green Light on Green Stocks.