3 Eurozone Stocks That Aren't as Scary as You Think

If you spend too much time staring at the headlines, you'll likely have a tough time coming up with any reason to invest in a company based in Europe.

Europe, and, in particular, the rowdy rabble that share the euro currency, really is in rough shape. Banks have made a lot of bad loans, governments have borrowed too much, and with very few exceptions, the region's individual economies are in decline.

But it'd be a mistake to assume that just because a company is based in Europe that its business is solely levered to the European economy. Just like the U.S.' largest businesses, many European multinationals count on areas outside of their home continent for a big slice of their business. But because of the dire eurozone headlines, many of these businesses can currently be bought at a discount to comparable companies in the U.S.

1. Telefonica (NYSE: TEF)

Source: S&P Capital IQ, author's calculations.

If you want exposure to U.S. economic conditions, the major telecom providers are a great way to do it. As the table above shows, Verizon (NYSE: VZ) is fully tilted toward U.S. exposure and archrival AT&T is similarly focused on the states.

The same doesn't hold true for Spain-based Telefonica. Though the company derived just a little more than half of its 2011 revenue from Europe, much of its business is outside of Europe -- in Latin America to be exact. Not only does this reduce downside liability by having a significant exposure outside of rocky Europe, but it's an upside for the company since it provides the company a major presence in fast-growing economies like Brazil.

And if you're still concerned about the European exposure -- more than half of which comes from Spain itself -- consider this as well: The company's Latin American operations are more profitable, so while 46.5% of revenue comes from the region, it accounts for more than 60% of Telefonica's operating income.

2. Total (NYSE: TOT)

Source: Capital IQ, author's calculations. *ExxonMobil does not fully break out its non-U.S. exposure.

To be sure, Total has hefty European revenue exposure, but don't let that throw you off. For one, much of that exposure comes from France itself -- it's 23% of Total's total revenue -- and that's one of the strongest spots in the eurozone. But more importantly Total is selling global commodities, so its fate will hinge a lot more on the ups and downs of the energy markets than the specific European economy -- though that's not to say that a true collapse in Europe wouldn't have serious consequences for energy markets.

In all, this is a strong, stable, global energy player that you can pick up at a discount to most U.S.-based names.

3. Siemens (NYSE: SI)

Source: Capital IQ, author's calculations. *Includes Europe, CIS, Africa, and Middle East. **United States only.

Unfortunately, Siemens doesn't fully break out its European revenue, but instead lumps Europe, Commonwealth of Independent States (CIS), Africa, and the Middle East together. What we do know, then, is this -- of the 60% figure above, some of the revenue is coming from up-and-coming non-European economies like Russia, Egypt, Pakistan, and Nigeria. Additionally, 27% of Siemen's total revenue comes from Germany itself, which, like France, is one of the stronger eurozone economies.

As an industrial and energy-equipment giant like General Electric (NYSE: GE), Siemens is very economically sensitive -- whether we're talking about the eurozone specifically or the broad global economy. But with headlines blaring about eurozone risk right now, the stock offers a meaningful discount to non-Europe-based competitors.

Or... go American
I've rated all of three of the stocks above as outperformers in my CAPS portfolio. However, discounted or not, buying individual Europe-based stocks may not be within everyone's comfort zone. And depending on your particular situation, it may not be appropriate anyway. For those that want global exposure, but want to stick with U.S.-based companies that they know and love, you can check out three great investment ideas in The Motley Fool's free special report "3 American Companies Set to Dominate the World." Click here for your free copy.