In last week’s Income Without Borders we looked at the odds of Great Britain leaving the European Union, which we handicapped as low. This week we’ll look at the opportunities the situation presents.

We know opportunities are coming because we have seen this show before.

Greece’s potential exit of the European Union last year created broad stock market selloffs creating opportunities in key income sectors. And we believe the closer we get to Britain’s June 23 referendum on the measure, the more fear will affect the markets, and more opportunity for sell-off created bargains.     

Given how few bargains exist in strong, income-producing stocks, investors should be keenly interested in how the “Brexit” plays out.

As most investors know, the biggest challenge today is finding reasonably priced income investments in a world where many of them are now overvalued as investors piled into safe-haven assets in the past few months after two extreme global market declines in the last year. And government fixed income securities have yet to offer an alternative.   

In fact, the U.S. Treasury’s Office of Financial Research has warned that reductions in interest rates in Europe and other foreign countries may spill over to U.S. interest rates. Long-term U.S treasuries yields and term premiums fell markedly in the first quarter, and they are near historical lows. The Treasury thinks this continued low level of U.S. long-term rates is a source of financial instability.

All the more reason to invest in strong, high-yielding Global Income Edge stocks.

We don’t think Britain will leave the European Union, but even if it does, our Global Income Edge’s British multinational holdings are in good shape to weather the ensuing storm. They are diversified globally, and are in vital industries with pricing power such as healthcare, telecom and utilities.  For subscribers, we provide an update on our British holdings later in this story.

In the end, whether Brexit happens or not, people will still pay for electricity to heat their homes, pay their telecom provider to call their families, or buy prescriptions after seeing the doctor. And even if these will be bit more expensive if Brexit happens, these essentials will always be the first to be paid.

As far as Europe itself, we have generally been bullish on it and continue to be. Although we haven’t seen stellar growth, we have seen steady growth, and euro area retail sales have been steadily gaining over the last 28 months. But we remain cautious. Given our more uncertain, slower-growth world, no safe haven market or country exists.

Portfolio Update

Here’s a rundown of our British holdings in our Conservative Portfolio. As we noted in the report, we believe these firms for the most part would not be affected by a Brexit, and we would view any dips in the stock from overselling due to Brexit fears as a buying opportunity. 

Diageo (NYSE: DEO) is one of the world’s largest spirits makers, 14 of the top 100 distilled spirits brands in the world, including Gordon’s gin, Johnnie Walker scotch, and Smirnoff vodka, with spirits accounting for about three-quarters of sales. Beer generates about 20% of revenue, with brands ranging from the iconic Guinness to Kenya’s national beer brand, Tusker, and the Jamaica’s Red Stripe.

The remainder of revenue comes from wine, including Sterling Vineyards and Rosenblum Cellars. And almost 43% of Diageo’s business is in Latin America, Asia, Africa, Eastern Europe and Turkey, whereas the rest of its business is in the United States and Western Europe. 

With a dividend yield of 3.12%, DEO is a Buy up to $130

British pharmaceutical GlaxoSmithKline (NYSE: GSK) recently beat earnings expectations and expects double-digit earnings growth this year.  

Even as the company has been experiencing heavy competition from generics in the United States and Europe, analysts believe that the recent launch of respiratory drugs and the strengthening in other divisions will offset this weakness to keep pharmaceutical sales steady for the next three years.

With respect to Brexit, in its annual report, published in late March, Glaxo said it did not believe there would be a “material adverse impact” on its financial position. Though Glaxo did say if Brexit occurs it would “create uncertainty and add complexity . . . with some short-term disruption.”

However, it revealed that it had “plans in place to mitigate [the] effects” if voters chose to leave the EU. “We do not currently believe that there would be a material adverse impact on [our] results or financial position.” With a yield of 6.73%, GSK is a Buy up to $54

National Grid (NYSE: NGG) is a diversified, regulated energy utility that has about half of its assets in the United Kingdom and the United States.

As we have noted, it owns the high-pressure gas transmission system in Britain, as well as electricity transmission systems in the northeastern U.S. At a $48.4 billion market cap, National Grid is nearly the size of America’s biggest utility, Duke Energy.

Given that the utility does not operate in trade with Europe, is globally diversified, and is insulated by a regulated guaranteed rate of return in its service territories, we do not expect the utility to be impacted from a Brexit.

With a yield of 4.63%, NGG is a Buy up to $74 

Unilever (NYSE: UL) has been one of the most resilient global consumer staples firms in a difficult global environment. We’ve been impressed with its management and believe the firm will be a great beneficiary of a global recovery.

CEO Paul Polman said Brexit would not have a material impact. 

“Unilever is in 190 countries in the world,” said Polman, a Dutch citizen. “People need to buy shampoo, people need to eat their Knorr or Cup-a-Soup, and they want to buy their Coleman’s and they want to buy their Magnum ice cream. They are not going to say that is function of if I am in the EU or if I am not in the EU.”

With a dividend yield of 3.17%, UL is a Buy up to $54

As the world’s second largest mobile telecommunications company, Vodafone has a whopping 434 million wireless customers who pay a wireless bill each month.  It owns networks in 26 countries and has partner networks in more than 50 others.

About Brexit, Vodafone’s CEO Vittorio Colao said,  “Uncertainty is never good for business, although Vodafone is very large and we are in many countries inside and out of Europe so we can deal with uncertainty – it’s never good, but we can deal with it.”

With a dividend yield of 7.4%, VOD is a Buy up to $39.