This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"France Telecom (NYSE: FTE) -- my top pick for 2009 -- is one the world's best-managed telecom companies," says global expert Nick Lanyi in his income-focused advisory service, High-Yield International.
Lanyi states, "The dominant provider of wireline phone service in France, FTE also is the leading wireless provider in the country and a major wireless and broadband-Internet provider throughout Europe.
"About 40% of the company's profits come from outside of France, including exposure to emerging markets with excellent long-term growth potential, including Poland and several African countries.
"FTE has invested heavily in Voice over Internet Protocol (VoIP), and its leadership in this area -- 5.4 million customers in France -- has given it a foot in the door in many homes, allowing the company to generate strong sales growth for its high-speed Internet services. FTE has relatively strong profit margins and has succeeded in cutting costs in recent years.
"The stock currently yields 10.8%, with a dividend payout ratio of less than 50%. With strong cash flows -- thanks to monthly bills paid by its millions of customers -- FTE should have no trouble maintaining the twice-a-year dividend at its current level.
"With the global economy slowing steeply, investors should hunker down with relatively safe companies that pay them now rather than in the indefinite future. FTE is a sterling example."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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