Millicom International Cellular - Growth & Income

Millicom International Cellular (MICC) recently hit a 52-week high of $102.72. Anyone looking for a play on emerging or frontier markets should consider this stock.

Company Description

Millicom International Cellular provides prepaid cellphone services in 13 markets throughout Latin America and Africa. Millicom operates in some very intriguing countries, such as Chad, Rwanda, Tanzania, Bolivia, and Paraguay.

The company also operates cable and broadband businesses in five Central American countries, which accounts for approximately 6% of total revenues. It has a market cap of $10.9 billion and is headquartered in Luxembourg.

Strong Customer Growth

Total revenue increased 14% from the second quarter of 2009. Total mobile customers increased 19% year-over-year to 36.7 million. The breakdown of total customers by market is as follows:

Central America: 37%
South America: 25%
Africa: 38%

Each market saw strong customer growth compared to the second quarter of 2009. Central America saw an increase of 10%, South America gained 15%, and its African market saw a 34% increase in customers year-over-year. These increases reflect the growth of emerging and frontier markets.

The operating profit margin improved to 27.6% in the second quarter, up from 25.7% in 2009. Earnings per share was $1.20, up 17% from $1.05 in the same quarter of 2009.

The Zacks Consensus Estimate for 2010 is $5.86 per share, representing 16% growth from 2009 EPS. The estimate for 2011 is $6.98, or 19% higher than 2010 EPS.

Fundamentally Sound

Return on equity was 25.2% in last twelve months, more than double the industry average of 11.6%. Millicom trades at 19.3x trailing earnings, a premium to the industry average of 13.2x.

Approximately 22% of Millicom's total assets are held in cash and cash equivalents. It pays a dividend of $2.64, yielding about 2.6%. It is a Zacks #2 Rank (Buy) stock.
 
MILLICOM INTL (MICC): Free Stock Analysis Report
 
Zacks Investment Research