Banco Santander, S.A. (ADR) (NYSE:SAN)’s yield of 10% knocks Paraguay’s bond out of the park. However, Santander’s yield comes with the caveat of being in Santander stock, but that is only a problem if you do not automatically reinvest your dividends. As a foreign bank headquartered in Spain, Banco Santander has had a turbulent five years and its P/E stands at 9. Bulls point out that the bank has decent profits despite adverse conditions, it is better capitalized than most Spanish banks, and its operations are mostly in Latin America and financially calmer parts of Europe, not in Spain. In the past several years, Santander spun off its Brazilian, Chilean, and Mexican operations as separate publicly-traded companies, raising cash and its profile without taking on debt.

Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) operates in Paraguay and most other South American countries. Petrobras shares had a bad 2013 – down 20% -- with problems from falling prices and output estimates to rising labor costs. Problems will likely continue in 2013, but Brazil is set for a better year and Petrobras may finally be able to raise domestic fuel prices. Risk and uncertainty are priced into Petrobras’s shares, but with a 5.1% dividend yield and a P/E of 13, it looks like a much better risk than a poor and landlocked country’s foreign debt.

For an all but guaranteed dividend and exposure to every Latin American market, look no further than The Coca-Cola Company (NYSE:KO) . With a dividend yield of 2.7%, you would be going down only two percentage points from Paraguay’s sovereign debt for a huge reduction in risk. Coca-Cola has not only preserved its dividend through hard times, it’s raised it every year for the last 50. However, security comes with a price and Coca-Cola is the most expensive stock of the bunch, with a P/E of 19.

The international market is full of deep risks and opportunities. Looking abroad can lead you to excellent yields and huge upsides, but international investments can also be harder to research and keep track of. None of these companies are risk-free, but I wager that they will provide better and safer returns over the next ten years than Paraguay’s foreign debt.

The article One Way Not to Chase Yield originally appeared on Fool.com.

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