There are several financial stocks based in the U.S. with long histories of dividend increases. But you won’t find any European banks on the list of Dividend Achievers, a group of 264 stocks with 10+ consecutive years of dividend raises.

For investors willing to consider international stocks, there are some high-yield opportunities outside the U.S. Several European banks have much higher dividend yields than their U.S. counterparts.

For example, Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) has a high dividend yield of 5%.

has an improved balance sheet, generates steady profits, and rewards shareholders with a hefty dividend yield.

The stock is up significantly in 2017, reflecting its improving fundamentals. This article will discuss why BBVA could be an attractive stock for dividend investors.

Business Overview

BBVA has a very long operating history. It was founded all the way back in 1857. Today, it operates as a global, integrated financial services company.

It provides a full range of banking, and financial products and services. It is based in Spain, with a huge presence in Europe. It is also the largest financial institution in Mexico, and also has significant operations in Latin America, South America, and the U.S.

Lastly, BBVA’s Asia operations include branches and representation offices in China, Hong Kong, India, Indonesia, Japan, Singapore, South Korea, Taiwan and the United Arab Emirates.

Source: Investor Factsheet

BBVA also has a 49.85% ownership stake in Garanti Bank, the second-largest bank in Turkey by assets.

In all, BBVA has 8,500 branches, more than 31,000 ATMs, and has 70 million customers. It operates in 35 countries across the world.

Last year was a very strong one for BBVA. The company earned $3.89 billion in 2016, a 32% increase from 2015 in euros, and its highest profit total since 2010.

Earnings growth was due to higher interest income, moderating expenses, and lower impairment losses.

BBVA’s net interest income increased 3.9% in 2016—or 14.9% in constant currencies. Momentum accelerated as the year progressed, with interest income reaching its 2016 high in the fourth quarter.

In addition, cost-cutting initiatives helped improve BBVA’s efficiency ratio to 51.9% for the year.

BBVA generated a Common Equity Tier 1 ratio of 10.90%, up 58 basis points, a solid level that implies strong capitalization. The company expects an 11% ratio in 2017.

Growth Prospects

Outside of improving economic growth in BBVA’s major markets, the company’s most important growth catalysts are expansion in new channels, new customer additions, and cost discipline.

First, BBVA has made a major push in mobile. As of the first quarter, BBVA had 19.3 million digital customers and 13.5 million mobile customers, up 20% and 41%, respectively, year over year.

Source: Q1 Earnings Presentation, page 24

BBVA’s digital sales are now above 20% of total sales in several markets, including Spain, the U.S., South America, and Turkey.

Focusing on digital and mobile could be a significant boost to BBVA’s bottom line, as digital presents much less overhead than operating physical branches.

Separately, BBVA is focusing on improving profitability, especially in two of its major markets, Spain and the U.S.

The company made notable progress in these areas in 2016. For example, BBVA’s core revenue (net interest income plus net fees and commissions and insurance results) rose 5.5% from 2013-2016.

In the U.S., the company is well-positioned to benefit from rising interest rates, which is a compelling growth catalyst. BBVA’s net interest income is expected to increase 6%, for every 100-basis point change in the Fed Funds rate.

With the Fed having increased rates three times since the financial crisis ended, with further rate hikes in store over the duration of 2017, BBVA is in good position to generate growth during a rising-rate cycle.

The company’s strong results in these markets continued in 2017. Banking activity continued to improve in Spain.

Source: Q1 Earnings Presentation, page 33

BBVA’s net profit rose 69% in the first quarter, compared with the same quarter last year. This was the highest profit total in the past seven quarters.

Net interest income rose 4.1% year over year, or 9.2% at constant exchange rates. Not only did higher net interest income boost BBVA’s bottom line, but cost cuts once again helped accelerate growth.

The successful implementation of efficiency initiatives, resulted in a 1.2% decline in operating expenses, and a further improvement in the efficiency ratio, which fell again to 49.1%.

BBVA significantly outperforms its industry peers in terms of efficiency. According to the company, European banks on average had an efficiency ratio of 68.2% at the end of 2016.

Such strong efficiency will go a long way towards securing BBVA’s dividend.

Dividend Analysis

In the past four quarters, BBVA paid dividends totaling 0.371 euros. When converted to U.S. dollar, this comes out to an annualized dividend of roughly $0.42 per share, as each American Depositary Share represents one ordinary share in BBVA.

Based on its current share price, BBVA offers investors a hefty 5% dividend yield.

One thing investors should keep in mind is that foreign dividends usually have higher taxes. According to this report from tax consulting firm Deloitte, dividends from Spain are subject to a 19% withholding tax.

Another thing for investors to keep in mind is that BBVA has indicated it will move to a semi-annual dividend going forward.

Importantly, BBVA’s dividend looks secure. The company maintains a policy to distribute 35%-40% of profits as dividends. This is a very modest payout ratio which should be manageable throughout the economic cycle.

And, BBVA is in solid financial position.

Given the struggles of the Spanish economy and the debt crisis gripping the Eurozone, investors might naturally assume BBVA’s balance sheet is in rough shape.

But that is actually not the case; BBVA receives solid credit ratings from all major credit ratings agencies. For example, BBVA has a BBB+ credit rating from Standard & Poor’s, with a positive outlook. Its credit rating is solidly investment-grade.

And, while the company has approximately $8.4 billion in debt maturities coming up this year, its debt maturities tail off significantly over the next few years. BBVA’s debt maturities decline to $5.5 billion in 2018, $4.8 billion in 2019, and $5.6 billion in 2020.

As a result, barring a major financial crisis, BBVA’s dividend appears to be sustainable.

Final Thoughts

Investing in international stocks carries unique considerations that investors should take into account before buying shares, such as currency risk and dividend withholding taxes.

That said, BBVA is a high-quality company. It has significantly improved its capital position, and it has many promising growth catalysts to look forward to up ahead.

Plus, it rewards investors with a 5% dividend yield, which is significantly higher than most big U.S. bank stocks.

As a result, BBVA could be an attractive stock for income investors.