Barron's High-Dividend European Stock Picks
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Date updated:01-10-2009

As dividend payouts come back into vogue, the Continent's the place to be.

symbol name last price % change open
  • +
  • DT
    Deutsche Tele Ag
  • $14.36
  • +0.42%
  • $14.27

Rajesh Shant, who is head of European equities for Newton Capital Management, says that when picking high-dividend payers, "you want a dividend that will be maintained or increased, and it doesn't have to be a big increase. Middle-single-digit EPS and dividend growth can be particularly attractive in today's environment." Combine such a dividend payout with modest stock appreciation, and total return can approach double digits. Among the high-dividend payers he likes, Shant lists Deutsche Telekom (DT), with a 2009 expected yield of 7% and cash flow this year that will cover dividends a strong 4.5 times. Its ratio of net debt to earnings before interest, taxes, depreciation and amortization (Ebitda) is 1.7 times.

People owning DT also tend to own: AMXATBCECCUCHLCVCDISH

TheStreet.com Rating: C What is this?

  • +
  • TOT
    Total S.a.
  • $62.80
  • +1.49%
  • $62.45

At French oil giant Total (TOT) the respective ratios are 5.8%, 3.7 times and 0.3 times.

People owning TOT also tend to own: ADMAIZALLCBCNICOPCSC

TheStreet.com Rating: C+ What is this?

  • +
  • TEF
    Telefonica Sa
  • $86.40
  • +1.03%
  • $85.41

Among the stocks that Bolton favors are Spain's Telefonica (TEF), which has a 7% 2009 yield and 3.8 times dividend cover, and BP, the British oil producer, which has a 6.9% yield and 2.8 times cover. Falling oil prices are an issue for BP, but he thinks it will try to avoid a dividend cut, owing to bad memories of a prior cut in the 1990s.

People owning TEF also tend to own: AKAMAMDAMTDCIENCSCOEMCEWS

TheStreet.com Rating: B What is this?

  • +
  • BP
    Bp Plc
  • $58.35
  • +1.89%
  • $57.89

Among the stocks that Bolton favors are Spain's Telefonica (TEF), which has a 7% 2009 yield and 3.8 times dividend cover, and BP, the British oil producer, which has a 6.9% yield and 2.8 times cover. Falling oil prices are an issue for BP, but he thinks it will try to avoid a dividend cut, owing to bad memories of a prior cut in the 1990s.

People owning BP also tend to own: BACCBSHCLEDFITBFREGE

TheStreet.com Rating: C+ What is this?

  • +
  • DWX
    Spdr S&p Int'l Di
  • $55.399
  • +1.43%
  • $55.08

There's also the SPDR S&P International Dividend ETF (DWX), which tracks the S&P International Dividend Opportunities Index, a benchmark for income-seeking investors. It isn't limited to European companies.

People owning DWX also tend to own: BPDTTEFTOT

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