U.S. investors who buy foreign stocks for their yield are often disappointed.

After all, both the principal and income can be hit by currency declines, and some of the yield goes to tax before you get it.

This is especially true in 2015 because the dollar has been strong against almost all other currencies.

However, that trend seems likely to reverse going forward. That means we should look for foreign income stocks that can give us the triple whammy of a nice dividend, a capital gain from the currency rising, and an increase in the dividend in dollar terms.

The Currency Connection

Here’s an example, just to illustrate how this might work.

Suppose you spend $1,000 to buy 100 shares of a Canadian stock trading at CAD 13.10 at today’s exchange rate of CAD 1.31 = $1. The stock is paying a dividend of CAD 0.524 per share, which translates into $0.40 per share and a 4% yield.

The following year, oil prices rise a bit, and the oil-dependent Canadian dollar rises to CAD 1.09 = $1, a 20% increase. If the Canadian market stays steady, your Canadian shares are worth $13.10/1.09 = $12, a nice 20% gain.

Meanwhile, your income of CAD 0.524 per share has also risen in U.S. dollars, to $48 on 100 shares, giving you a nice 4.8% yield on your initial $1,000 investment. That’s a pretty nice result.

Thus, with one currency move in the right direction you can boost both your income and your capital.

Of course, you still need to figure out which currencies are going to move in your direction in the next year. After that, you should look for solid income stocks in those countries.

Specifically, you’ll want to look toward mostly domestic stocks, such as retailers and local financial institutions, because a big rise in the currency will be reflected in lower income for exporters, who may struggle financially.

Down But Not Out

In a year when currencies have been so volatile, the best bet for sharply rising currencies is those that have fallen the most against the dollar.

Even if you eliminate places like Argentina and Venezuela, where the economies have serious problems, there are still lots of countries like Colombia where commodity price declines have caused sharp currency declines and where some rebound is likely – even without commodity prices rebounding.

For a country with a solid economy and politics, consider Norway, where the krone is down 21% against the dollar in the past year.

The hydropower and branded food conglomerate Orkla SA (ORKLY) has a historic yield of 4.5% and, according to the 4-traders website, earnings are expected to increase sharply in 2015. A rebound in the Norwegian krone would do very interesting things to this company’s yield.

Another potential rebounder is Russia, where the currency is down 31% over the past year. Here, the big oil and gas companies have been badly affected by the price decline, even though they’re generally low-cost producers.

However, with sanctions on Russia becoming less effective and European companies seeking to do more business there – not to mention Russia’s market selling at a historic P/E of just six times earnings – there’s plenty of scope for a rebound in both the currency and the market.

The most effective way to play this is the Market Vectors Russia ETF (RSX), a $2 billion ETF that seeks to match the performance of the Market Vectors Russia Index. RSX offers a nice historic yield of 4% and is currently trading at a P/E ratio of 6.

Finally, somewhere between the two in terms of quality is Brazil, where the currency is down 34% in the last year. Inflation is running around 8%, and interest rates, at 14%, are sufficient to keep inflation from taking off.

The best bet in Brazil is a bank, which will benefit from high interest rates. Banco do Brazil SA (BDORY) is trading at 3.4 times historic earnings and 4.3 times prospective earnings, and it currently yields 9.7%.

While 2015 earnings are expected to be down, any recovery in Brazil’s currency and economy will pay off in both higher price and higher dividends for BDORY.

Bottom line: International investing is frequently said to involve currency risk, but with the dollar having been so strong and the U.S. balance of payments so weak, currency risk can quickly become currency opportunity.