Roundtable: Best World Cup Stocks

After an exciting start to the World Cup this past weekend, the field is still wide open as to who will win, and Motley Fool employees have no shortage of opinions. In this article, we asked four writers and analysts to pick their favorite to win -- and even better, to choose the best stock from that country.

Let the shootout begin.

Alex Dumortier, CFA, Fool contributor
Country Pick: France
Stock Pick: Total (NYSE: TOT  )

As far as my country pick to win the World Cup, I'm going with France; however, let me be clear: I'm making this pick out of patriotic duty (I'm half French), not rationality. The glory days of France's '98 World Cup win are long behind us.

Fortunately, I have more conviction in my country stock pick: Total, the French oil major. The stock hasn't escaped the downdraft that has hit the oil industry in the wake of the Deepwater Horizon Gulf of Mexico disaster. Total's American depositary receipts (ADRs) have lost more than a quarter of their value since the beginning of the year. However, Total's direct exposure to the U.S. offshore drilling ban is de minimis. U.S. oil production contributed just 1% of the company's total worldwide oil production in 2009.

Priced at just 8.4 times the next 12 months' estimated earnings and with a meaty dividend yield of 6.6%, Total shares could have patient investors screaming "Goooooal!" with the enthusiasm of a Brazilian football commentator in a few years' time.

Anand Chokkavelu, CFA, Fool editor
Country Pick: U.S.
Stock Pick: Philip Morris International (NYSE: PM  )

The country pick is with my heart; the stock pick is with my head. Makes sense: I've got no money riding on the World Cup, but I do own shares of tobacco king Philip Morris International.

Although it's an American company, Philip Morris International does no business in the U.S. (its sister company Altria (NYSE: MO  ) does all of that). Forty-four percent of its profits came from the ailing European Union last year, and its stock price has recently fallen due to that risk. It's a fair concern -- besides any demand concerns, a falling euro hurts Philip Morris's profits (which are reported in U.S. dollars).

That said, I believe Philip Morris is a good play if you believe Europe will stabilize. And any further share price drops make its 11 times forward earnings multiple and its 5.2% dividend that much tastier.

Nathan Parmelee, co-advisor, Global Gains
Country Pick: Brazil
Stock Pick: Braskem (NYSE: BAK  )

This year's squad isn't one of Brazil's strongest, but it still comes into the World Cup highly ranked and with a good shot of winning its sixth title. That and no clear-cut favorite is enough for me to hang my hat on the perennial contender. Brazil's record five World Cup titles are impressive, but in the last eight years, its Brazil's stock market that has put up better results. Petrobras (NYSE: PBR  ) has been a star performer the last few years and it should continue to do well as it develops its vast offshore oil reserves, but my pick to really shine in Brazil is Braskem. As a chemical producer, it's deeply cyclical, but its merger with Quattor gives it a near-monopoly position in chemicals and basic plastics in Latin America, and at just a little over book value, the market is underestimating its long-term potential.

Eric Bleeker, Fool editor
Country Pick: U.K.
Stock Pick: Vodafone (NYSE: VOD  )

While fans watching England bumble its way to a 1-1 tie with the U.S. shouldn't have visions of '66 dancing in their heads, better times could be ahead for the squad. Like its country's national team, I also see storm clouds lifting for Vodafone after a couple of rocky years for shareholders.

Despite its English roots, Vodafone is a telecom powerhouse that sports over 330 million customers across the world. Solid cash flow generation allows the company to pay a robust dividend, and its scale allows the company to test programs in different markets and roll them out globally at extremely fast rates.

Struggles in Turkey and an extremely competitive environment in India have contributed to declining margins and struggles for the company over the past couple years. However, as Verizon (NYSE: VZ  ) seeks ways to fund its own dividend, look for it to finally pay out some of the cash being generated by its Verizon Wireless unit. As a 45% owner of this joint venture, Vodafone's impressive cash generation will soar even higher, and those pained shareholders will be handsomely rewarded.

This roundtable was compiled by Fool editor Jordan DiPietro, who doesn't own shares of these companies. Philip Morris International is a Motley Fool Global Gains choice. Petroleo Brasileiro and Total are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.


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