Printing Money: Foreign Paper Pays Out 10.2%

     I've been struggling with three ironies.

     One: When the obituary for the American newspaper industry is written, where will it be published?

     Two: Will the publishers have the class to put out one last great "extra" edition detailing exactly how they failed to perceive the readership and advertising trends that their own reporters have been writing about for the past ten years?

     Three: Will newspaper owners use their last dividend checks to buy shares of companies that vanquished them? Will they realize that they could have bought their executioners instead of being edged out of their own industry and being forced to stop the presses?

     I don't know the answers to any of these questions.  I do know that U.S. newspaper industry is languishing; the Russell 2000 Publishing News Index has lost an annualized
-24.5% since 2003. 

     But I like newspapers.  In fact, my great-grandfather once owned a newspaper in Budapest, Hungary.  I've worked at newspapers; I even met my wife at one.  And I remain among the dwindling number of people who read their local newspaper -- on actual newsprint -- every day.

     Even though U.S. publishers are on the wane, I'm glad that's not true in the rest of the world.  In 2007, the latest year for which complete data is available, circulation in India grew +11.2% -- even as U.S. circulation slid -3%.  Newspapers, overall, are still a growing medium: 515 million people buy one every day, up from 488 million in 2002.

     I've been keeping my eye on a newspaper and media company in Europe that's paying a sweetheart 10.2% dividend yield.  In the five years ending December 31, 2007, it has gained +26% annually, with most of that return coming from compounded dividends.  Hold onto your seat: That rate of return changed $1,000 into $3,200 in five years. 

     I recently shared the details of this company with subscribers of my premium High-Yield International newsletter. 

     Here are four reasons I think this company is a winner:

     Diversity. The company's portfolio comprises more than 200 newspaper and magazine titles, 130 radio stations and more than 75,000 billboards.  These properties aren't concentrated in one hot-growth pocket, either, they span the globe and cover markets with a record of strong growth and favorable economic forecasts.

      Growth. This company owns a newspaper in India that reaches an astonishing 53.6 million people.  Advertisers are eager to get their products in front of India's burgeoning middle class, and newspaper publishers there are seeing profits rise +40% to +50% a year.  This is a sustainable march toward bigger and bigger bottom-line results. 

     Prospects. The company isn't ignoring the online space.  It has an active digital presence, with more than 100 websites worldwide.  True, online advertising accounts for less than 5% of total revenue, but that's simply a recipe for growth.  The company is well positioned to capture online ad revenue.

     Cash. This is our favorite, right? This company currently yielding 10.2%.  But that could improve -- they've been growing their dividend +11.7% a year, on average, for the past five years.  I expect that to continue in the coming years as strong economic growth means increased ad revenues.  Now, "strong economic growth" might be a phrase U.S. investors have forgotten, but this company's properties are in countries where robust growth is still the norm.  It's seeing dependable revenue growth of +5.5% a year. 

     Last point: The word around the campfire is that Mexican billionaire Carlos Slim -- who just edged past Bill Gates for the second spot on the Forbes list of richest people in the world -- is accumulating shares in this company.  When I hear that a smart investor like that is committed to a company, I get interested.  Savvy business minds don't throw good money after bad; they move in when they smell a bargain.

     If you've watched media companies over the years, you know there are no dependable income opportunities in the United States right now.  Investing in U.S. publishers is tremendously risky.  Their stocks are exceedingly volatile: Not only are newspapers losing out to other media, ad spending overall is tied to the state of a fragile and lackluster economy.

     That's why it's so crucial for investors to look abroad for those rich, double-digit yields.  And finding those opportunities is what subscribers of my premium investing newsletter High-Yield International have come to count on.      

     If you'd like to learn the name of this media company -- plus receive a steady stream of foreign stocks, preferreds and other investing ideas with exceptionally high dividend yields each month -- then I'd like to extend you a personal invitation to try my newsletter ... High-Yield International. Visit this link to learn more.

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