The correct answer is      (C.) Telesp (TSP)

Brazil is the class act of the so-called BRIC emerging markets. It boasts a combination of abundant natural resources, regional leadership, middle-class growth potential, and smart government that make it a great bet to benefit during economic contractions. Telesp, the Brazilian telecom company serving Sao Paolo, Brazil's largest city, is just one example of why the nation's GDP remains in positive territory and is expected to grow +2% to +4% in 2009 despite a global economic downturn (on March 1, the president of Brazil's central bank predicted +4% growth, pointing out the nation's US$200 billion surplus of net foreign reserves).

In Brazil, companies that provide local-phone service often have flat or low-single-digit revenue gains year over year because their core business suffers from subscriber declines (due to competition from wireless, cable, Internet, and other voice providers). But for all of 2008, Telesp's net revenue rose +8.5% -- a remarkable showing for a large legacy fixed-line telecom provider. Earnings per share for the quarter rose +12%, and operating income was up +11%, thanks to a +23.6% gain in the number of broadband-Internet subscribers relative to the fourth quarter of 2007. Telesp now has 2.56 million broadband customers. The fact that TSP continues to grow impressively underscores its potential -- Brazil's huge population remains underserved when it comes to broadband.

Part of the stock's relative strength during the past six months comes from the fact that its cash flows, while hurt somewhat by the economic slowdown, are much more reliable than those of most companies. That's one reason StreetAuthority editor Nick Lanyi continues to own TSP in the "Reliable Income" portfolio he profiles every month in his High-Yield International newsletter. In the latest issue, Nick profiles TSP and several other stocks that represent long-term, dependable sources of income during the recession, thanks to their still-growing businesses. To learn the names of Nick's other picks, and to learn more about High-Yield International, please visit this link.