Investors concerned that the US economic recovery is still sluggish should take a close look at emerging markets, suggests Mark Skousen, editor of High-Income Alert.

In these countries, growth is often twice as strong as in our domestic economy and valuations put many of these stocks in the bargain basement.

In the Philippines, infrastructure spending is rising. Government investment in roads, airports, and seaports will reach $294 billion during the next year. Foreign investment is up 60% in the last decade. 

Many multinational firms are choosing to locate their factories in the Philippines instead of China or Vietnam. And the country is a huge beneficiary of the outsourcing boom in the West. The Philippines has even overtaken India in voice call centers.

This is all good news for Philippine Long Distance (PHI), the country’s leading provider of landlines, cell phone service, and Internet broadband distribution.

The company currently serves 69.8 million customers. That makes for a steady stream of revenue. Sales topped $3.8 billion during the last 12 months.

Other financial metrics look good, too. PHI has a strong balance sheet. The firm’s operating margin is 26%. And management is earning a healthy 24% return on equity.

You’ll also earn an attractive 4.4% dividend yield. I estimate that PHI will earn $3.60 a share this year and more than $4 in 2016. That projected performance means the share price and the dividend should move higher in the weeks ahead.

So pick up Philippine Long Distance at market. This is one stock that I believe has a lot more upside potential.

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