Today I'm going to introduce you to a company in a stable, noncyclical business that offers a huge 6.1% dividend yield. The company is located in the eurozone, and its stock tends to be volatile. Despite these characteristics, I was confident enough to name it my top dividend stock for 2012.

That company is Veolia Environnement (NYS: VE) , which has its hands in the water utility business as well as in energy and environmental services. Below, I'll cover three major issues that dividend-loving investors need to keep their eye on if they want a piece of the action in Veolia.

Times, they are a changin'...
For much of the last decade, former CEO Henri Proglio expanded the reach of Veolia -- entering 70 countries and several industries. Unfortunately for shareholders, this expansion forced the company to its knees under the crushing burden of debt.


Current CEO Antoine Frerot is in the process of transforming Veolia into a leaner and meaner business that provides services crucial to our everyday existence. Recently announced deals -- for providing water services in both Nagpur, India, and Japan -- provide hope for investors that the company will be a force to be reckoned with in the global water industry.

Veolia is also trimming the fat in its operations. It has taken steps to exit the waste business in the United States, ceding control of the market to American industry stalwarts Waste Management (NYS: WM) and Republic Services (NYS: RSG) . Both companies, by the way, are excellent dividend choices in their own right.

Another major divestment is the company's transportation division, Transdev. No definitive deal has been announced, but exiting the transportation industry is crucial to providing the capital to help pay down the debt currently sitting on the company's balance sheet.

Boardroom antics
When Proglio vacated his role in 2009, he believed that he and Frerot were cut of the same cloth. Instead, Frerot realized that to survive, Veolia would have to undo some of the damage inflicted by the previous regime.

This didn't please Proglio, and it was rumored back in February that he was trying to get Frerot replaced. When the board of directors met at the end of that month, they sided with Frerot and his plan to refocus the company. Any change in leadership that strays from this cost-cutting plan could spell disaster for the company and its shareholders, so it's worth keeping an eye on.

Geographic concerns
Major utilities are supposed to be the safest and least volatile of stocks. Being located and providing services in the middle of the eurozone, however, can change all of that. Some are already questioning if the Greek government will be able to continue paying its bills.

Though the company doesn't have major operations in Greece, investors are worried that a panic contagion could spread to countries that Veolia does serve. I consider such possibilities to be remote: Though the panic may spread, cutting waste and water services would be a last-ditch move by extremely desperate governments.

Some Fool colleagues have offered up other potential plays to benefit from the eurozone crisis. Alex Dumortier thinks Spain's Banco Santander (NYS: SAN) with its 14.8% dividend yield is worth the risk. But with Spain's borrowing costs above 7% this morning, it's a bet I'm staying away from for now.

As Fool Rich Smith -- who lived in Russia back when it defaulted in 1998 -- points out, it's not time yet to get invested in major European companies with extensive exposure to Greece -- most notably the National Bank of Greece (NYS: NBG) .

So while banks are subject to the whims of market panic, I'm much more comfortable holding shares of Veolia. We'll need waste, water, and energy services no matter the economic climate. Make no mistake about it, though: Any improvement in Europe would assuage investor fears and be good for Veolia's stock price.

But if dividend stocks headquartered outside of Europe are what you're looking for, I suggest taking a look at our newest special free report: "The 3 Dow Stocks Dividend Investors Need." Inside, you'll get the details on three solid businesses that promise to reward shareholders for years to come. Get your copy of the report today, absolutely free!

At the time this article was published Fool contributor Brian Stoffel owns shares of Veolia. You can follow him on Twitter, where he goes by TMFStoffel.The Motley Fool owns shares of Waste Management. Motley Fool newsletter services have recommended buying shares of Waste Management, Republic Services, and Veolia, and writing a covered strangle position in Waste Management. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days..

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