From a recent Mad Money show: "I like a high-yielding telco play. I think that TEF is a good one."

The Citigroup strategist has also conducted an admittedly oversimplified but illuminating valuation experiment. At some firms, if dividends were ended and cash flow directed to stock buybacks with only maintenance capital expenditure, then some theoretically could buy all their shares outstanding relatively quickly: France Telecom, in about 3.5 years; AstraZeneca, 4; Telefonica (TEF), 5; and Roche Holding (RHHBY), 7.

Huge potential in Latam

International telecom. Not much more to say here.

Global telecom stocks have handled the market correction quite well. Both Telefonica and Vodafone posted great revenue and profit growth. I prefer Telefonica over Vodafone, because of the potential tax bill Vodafone has with their buyout in India. Telefonica is expanding into Italy, Latin America and Spain. I conscider both of these companies as global investment plays, they have the capital to make big investments in high growth emerging market economies, and at the same time improve profitability and return on investment.

Global telecom stocks have handled the market correction quite well. Both Telefonica and Vodafone posted great revenue and profit growth. I prefer Telefonica over Vodafone, because of the potential tax bill Vodafone has with their buyout in India. Telefonica is expanding into Italy, Latin America and Spain. I conscider both of these companies as global investment plays, they have the capital to make big investments in high growth emerging market economies, and at the same time improve profitability and return on investment.

1 euro special dividend payable in 2008

Telefonica

11.98 1.38 2.40%

BUY