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"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."

Warren Buffett's rule epitomizes how to take advantage of money-making opportunities in the stock market. And he's seeing serious opportunities right now -- in the past quarter alone, Buffett's Berkshire Hathaway (NYSE: BRK-B  ) has invested $24 billion in stocks, the most in 15 years!

What's creating all these opportunities? Fear. Greece is teetering on the brink, Portugal, Italy, and Spain are in serious trouble, and the global financial system -- once again -- is sitting downhill of a slow-moving train wreck.

Blood in the streets
It probably goes without saying that Wall Street is especially reluctant to own European companies these days. Over the past six months, the Dow (INDEX: ^DJI  ) has fallen 4%, while European stocks have plunged 17%. The euro itself has dropped some 7% -- remarkable for a currency over such a short period of time.

All this should suit savvy Fools just fine. The more-or-less indiscriminate selling has pushed valuations down and dividend yields up. That means opportunities for us.

About those opportunities...
According to S&P Capital IQ, a full 20 well-established eurozone companies trading on major U.S. exchanges are now yielding over 5%. Now, I'm not suggesting that you just go out and buy every European stock willy-nilly (that would be foolish, with a small "f"). Europe faces some very real risks, ranging from the possibility of a deeper economic downturn to the outright default of sovereign countries and panic in credit markets.

What we're looking for are companies with reasonably stable businesses, that can afford to meet their short-term interest obligations (in case credit gets more expensive), and that earn their revenue from a diversified geographic base.

In fact, companies with significant exports from the euro area could actually benefit a bit from the carnage, as a weaker euro currency actually helps to boost their revenue.



Euro Exports as % of Revenue*

Interest Coverage

Dividend Yield

Telefonica (NYSE: TEF  ) Spain 43%                              4.8 10.9%
France Telecom (NYSE: FTE  ) France 30%** 3.7 11%
Nokia (NYSE: NOK  ) Finland 66% 9.0 8.1%
Total (NYSE: TOT  ) France 31% 35.1 6.1%
Veolia (NYSE: VE  ) France 27% 2.0 12.9%

Source: S&P Capital IQ. *As of fiscal 2010. **Approximation.

Telefonica provides fixed telecommunications, mobile, and Internet services to Spain, Europe, and Latin America. It's similar to AT&T in the U.S., except that while U.S. fixed telecoms operate in a difficult, mature industry, Telefonica has access to the fast-growing countries. Over the past five years, revenues at its Latin American division have nearly doubled while operating profits soared more than fivefold to surpass its other regions in profits.

While France Telecom is more tied to euro countries than Telefonica is, the vast majority of its European exposure is to -- you guessed it -- France, which is among the strongest economies. While its European divisions could stay under some pressure, the telecom has had a great deal of success in growing its customer base, particularly in Africa and the Middle East, where it added 23% more mobile customers in the first half of the year.

OK, you probably have heard of Nokia, the Finnish mobile giant. It's struggled to maintain market share lately in the face of the iPhone-Android onslaught and is betting on its new Lumia line helping sales to bounce back. It's always a bit risky betting on slipping tech companies, but if Nokia manages to turn things around -- or even hang on to its current position -- it looks pretty cheap.

Total is a massive integrated oil and gas company -- about the size, actually, of ConocoPhillips. With 10 major drill targets this year, Total recently revised its five-year hydrocarbon production forecasts upward and has been proactively moving its money around to reduce exposure to European banks.

Veolia provides water, environmental, and energy-grid services around the world. While only a quarter or so of its revenue comes from outside of Europe, about two-thirds of its euro revenue comes from the strongest countries, France and Germany. The company has a fair bit of debt and may be forced to reduce its dividend somewhat from its lofty 12.9% yield, but it still looks pretty cheap given the relative stability of its business.

I've given you five intriguing names that are worth considering right now. However, you probably already know that while Europe may be a big reason for many of today's bargains, it's hardly the only place you can find them.

If, like Buffett, you're looking to take advantage of other opportunities in the market right now, I invite you to check out The Motley Fool's "Secure Your Future With 11 Rock-Solid Dividend Stocks." You can download this special report for free by clicking here today.

Ilan Moscovitz doesn't own shares of any company mentioned. The Motley Fool owns shares of Telefonica and Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of France Telecom, Veolia Environnement, Berkshire Hathaway, and Total. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (16) | Recommend This Article (55)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 15, 2011, at 6:00 PM, TMFBreakerRob wrote:

    I have a very high risk tolerance, but I would strongly encourage folks to be very careful investing in most of these companies.

    VE and TEF have suffered significant recent reverses. VE will likely cut their dividend, but if you're OK with that more power to's fundamentally a very solid business and should do well in the long term (but likely with lower dividends). TEF has affirmed their dividend for a while, but its unclear if that's sustainable given their losses. NOK is well known for getting very badly sliced up in the phone market and I personally would find it difficult to justify buying it in "hopes" of a turnaround, let alone an ongoing dividend.

    I'm not sure about FTE (unfamiliar with it). TOT is the only one of this group where I'd have any kind of interest in buying for dividends.

    But....the final kicker >>

    Most non-US dividend paying companies will have a very large chunk of the dividend removed for tax withholding by the home country when its paid to a US account. If you are holding the security in an IRA, you're out of luck, but if its in a taxable account you may be able to file with the US for a credit if you itemize. See your tax advisor.

    Bottom line: Do your own due diligence. :)

  • Report this Comment On November 15, 2011, at 6:24 PM, hardnokgrad wrote:

    Sooner or later NOK pops up on someone's dividend screen, and since I learned the hard way, I figure I would pay it forward and save someone else the pain. If you own NOK, or any foreign stock (ADR) INSIDE AN IRA, check to see if the country has a TAX on DIVIDENDS that gets withheld at the source. I only learned when it popped upon my statement! Taxable investors can take the Foreign Tax Credit,but I believe IRA investors are OUT OF LUCK! Also for dividend newbies, check the FREQUENCY and PAYMENT DATES. NOK is ANNUAL (1x). It would be great if Fool Contributors could find/research tax status of their recommendations,(MAYBE there's a useful article RE ADRs!) since in many cases, THEY DON"T OWN THE STOCK being recommended TO YOU.

  • Report this Comment On November 15, 2011, at 6:26 PM, hardnokgrad wrote:

    What a coincidence! Guess great minds think alike!

  • Report this Comment On November 15, 2011, at 7:37 PM, uicfau wrote:

    To compare yields of stocks from different countries you should also have information on the tax withholding in those countries. Can you supply this information? Perhapos for all European countries?

  • Report this Comment On November 15, 2011, at 7:56 PM, mrb1llz wrote:

    Perhaps you would like to comment on the performance of your funds for the people that hate mutual funds per your ad. Not exactly great performance.

  • Report this Comment On November 15, 2011, at 8:10 PM, JaxJaguar wrote:

    TEF has an overall average return of 4.81608% over the past 5 years. I think I will stick with MCD, MO, NLY and GLD, which are doing and have done much better.

  • Report this Comment On November 15, 2011, at 8:35 PM, Tsharp1947 wrote:

    Another recent 'review' of TEF by you went out of its way to point out (wrongly) that TEF was overly dependent on troubled European economies and the dividend was shaky--GET YOUR STORIES/RECOMMENDATIONS STRAIGHT!!!

  • Report this Comment On November 15, 2011, at 10:03 PM, UFOFred wrote:

    Hi All,

    Regarding foreign country tax withholding, I found a Seeking Alpha article,

    According to this article, the rates for the countries discussed are

    Spain 19%

    France 25%

    Finland 28%

    And, by the way, England (UK) charges zero except for REITS. I'm considering Vodaphone (from the UK) for my IRA.


  • Report this Comment On November 15, 2011, at 10:33 PM, constructive wrote:

    While these companies have plenty of foreign revenue, I definitely don't think it's accurate to call them all "exports". For example, TEF's South American telecom services originate and occur within South America.

  • Report this Comment On November 15, 2011, at 10:40 PM, constructive wrote:
  • Report this Comment On November 16, 2011, at 12:21 AM, rhoop wrote:

    I haven't been ignoring these companies. I'm purposely avoiding them.

  • Report this Comment On November 16, 2011, at 11:12 AM, maazzoo69 wrote:

    Hey guys, what is Interest Coverage means?? I am new to investing and I really want to know what the number signifies. Thank you!

  • Report this Comment On November 16, 2011, at 2:27 PM, geecheegirl wrote:

    Once again, Total shows only a 2.7% dividend yield everywhere else one might check.....not the 6.1% shown here. Then there's that foreign tax to consider. Doesn't leave much, does it? I hate it when the dividend rates are mis-quoted in these MF articles. No matter what spin the writer puts on it to come up with these rates, I'll always follow the most reliable sources.

  • Report this Comment On November 16, 2011, at 3:35 PM, TMFDiogenes wrote:

    Sorry, I should have explained what interest coverage was in the article. Interest coverage is just a company's operating income (basically, earnings before interest and taxes and so forth) divided by their interest costs. So and interest coverage of 1 tells you a company is spending all of its profits just repaying interest, a coverage of 5 tells you 1/5 of earnings are going to interest etc. Higher, obviously, is better, though capital-intensive companies with stable businesses may have lower numbers because they need and can handle more debt.

  • Report this Comment On November 16, 2011, at 4:01 PM, constructive wrote:

    Most of Total's non-Euro revenues are probably transacted in dollars, then reported in Euros, with the US-listed shares trading in dollars. Not sure if Euro weakness will really help them. Thankfully, currency fluctuations are probably not significant to their long-term returns.

    Assuming you're not George Soros, you probably don't have any business speculating in currencies.

  • Report this Comment On November 24, 2011, at 11:53 AM, foolsfrolic wrote:

    We expect much from our government but we refuse to pay our share. We made taxes an unmentionable. . What do you want to give up. Safe and well kept roads and bridges, flood and disaster relief. Defense preparation. Terrorism prevention, help for the needy and the unemployed,pollution control, food and drug prortection, subsidies that are demanded by certain industries,

    One thing I would gladly give up is the useless non-productive congress.

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