Paul Tracy
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With interest rates near 0% and traditional income investments like savings accounts and certificates of deposits (CDs) earning next to nothing, blue chip telecom stocks like AT&T (NYSE: T) and Verizon (NYSE: VZ) have become wildly popular.

That makes sense. Telecom is a "recession-proof" industry. Regardless of what's happening with the economy, people will still need cell phones and cable TV. And with both stocks yielding close to 4.5%, both companies look like a good choice for income investors in search of high yields.

But there's a problem. As with a lot of American blue chips, these stocks look expensive right now. AT&T and Verizon sport P/E ratios of 16 and 20, respectively -- well above the S&P 500s historical average of 15.

And while a 4.5% dividend yield might seem like a lot, in the telecom industry, you can find much higher yields... and at a much better price.

For example, I've found a telecom that's currently yielding 8.4%. It enjoys the same competitive advantages as both AT&T & Verizon, and better yet... it's trading at a P/E ratio of 10.5 -- making it a much better value than AT&T or Verizon.

But you've probably never considered this company. In fact, I doubt you've ever heard of it.

That's because the company -- Telefonica Brazil (NYSE: VIV) -- isn't based in the United States. But before you dismiss this as just another "risky foreign stock," hear me out...

As one of two Brazilian fixed-line operators, Telefonica Brazil is one of the largest players in the business. The company has 11 million fixed-line clients, 3.5 million broadband users and 680,000 pay-TV subscribers.

In fact, not only does the company dominate both the fixed-line and broadband businesses, but with its recent acquisition of Vivo Wireless, Telefonica is now also the largest wireless operator in Brazil.

Due to the company's size, it's unlikely that this stock will provide blockbuster growth. But even so, after the recent acquisition, Telefonica Brazil was still able to grow its wireless revenues 20.5% year-over-year... helping boost the company's revenue by a modest 3.7% during the same period.

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