Avoiding Europe? Venture Back With This 5% Dividend
Join the club. And my bet is that it’ll keep giving the collective financial world the willies for years to come…
Nevertheless, as with many bad situations, if you dig through the weeds, you’ll eventually find a blooming flower. (Shoot me, I’m a romantic at heart.)
The same goes for stock picking. There’s almost always a perennial hiding in the dirt, sprouting amid the rocks. You just have to look for it.
In this case, that flower is a Spanish banking behemoth with diverse international exposure and a 5% dividend.
So won’t you please join me in saying, “Hola!” to Banco Vizcaya Argentaria S.A. (BBVA)…
Ignore the Rain in Spain
Banco Vizcaya is a bank with a 150-year tradition of doing good business.
It started out as a small Spanish trade bank, but its business isn’t limited to Spain. In fact, it’s become one of the biggest banking institutions in the world.
Even in the face of last week’s solid earnings from the bank, skeptics will say that Banco Vizcaya’s entrenchment in its native Spain makes it vulnerable to the chaos in Europe.
There may be some truth to that, but Banco Vizcaya’s global diversification enables it to readily offset European woes and keep itself positioned for future growth
And, yes, continue those dividend payments, too…
Decades of Payments
Banco Vizcaya, you see, has been keeping shareholders happy through dividend distributions for decades, and the company is intent on keeping up with that tradition.
In fact, it has a stringent stock and cash dividend policy that will keep the deposits coming to its shareholder brokerage accounts.
And that geographic diversification I mentioned is key to the continued dividend payments.
While Europe struggles and margins shrink for other banks, global institutions like Banco Vizcaya have profitable business activities all over the world.
It has operations in Mexico, South America and Asia, just to name a few, all of which contribute to the company’s cash flow.
It even owns a large stake in a bank in Turkey, an emerging market that we should all be keeping an eye on.
Plus, analysts are optimistic on Banco Vizcaya, and the stock price has been on the rise. (Also, for better or worse, even that loud-mouthed Jim Cramer likes it.)
Bottom line: Let’s assume Europe will one day regain its former glory. Or at least return to a healthier economic state.
If Banco Vizcaya is doing well now, without much contribution from its home country, just think how well it will be doing later, when Spain and Europe in general revive?
In the end, BBVA is a good stock to own today, but better still, it’s one to brag about in the future.