Written by TheDividendManager.com 

In examining French stocks a screen was run of those companies that pay a yield that is higher than 2.5 percent and has a market cap above 15 billion and from the list, there are several worthy candidates for a long-term dividend investor looking for overseas exposure.

[Below are the 13 ADRs identified with the 3 companies discussed in this article in bold print:)

 Company Market Cap Yield TOTAL S.A. 118.29B 4.97 Sanofi 107.24B 3.74 BNP Paribas SA 72.67B 4.45 AXA SA 56.25B 5.01 Air Liquide SA 41.55B 2.51 VINCI SA 40.86B 2.69 Danone 39.29B 2.73 Schneider Electric S.E. 37.95B 3.11 Orange S.A. 37.63B 4.45 Société Générale Group 34.784B 4.32 Credit Agricole S.A. 33.85B 5.03 Renault SA 22.86B 3.19 Michelin 20.17B 2.65 Carrefour SA 15.82B

3.56

From the above list, I think there are several worthy candidates for a long-term dividend investor looking for overseas exposure and my first is Société Générale…(PINK:SCGLY).  

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The banking giant is one of the largest in Europe with headquarters in Paris. The ADR program has been active in the U.S since July 1993. It primarily operates retail banks in France, although it also maintains a large presence in Russia, Africa, Romania, and the Czech Republic.

  • The banks recent earnings were better than expected as net profits came in at 390 million euros ($417 million).  
  • The firm’s capital position also improved. Its tier 1 capital ratio rose to 11.5% from 10.9% the year before.
  • Its global banking and investor solution segment posted net profits of 432 million euros in the fourth quarter, up from 286 million euros a year ago.  
  • International retail operations were strong, up over 50% to 438 million euros in the quarter. 
    • Russia was a solid contributor to growth through its Rosbank operations.  The Russian unit had net profits of 32 million euros in the fourth quarter versus a loss last year.  
    • The bank’s international operations were the highlight of last year. Net income for 2016 in this segment was 1.6 billion euros, up over 40% from the 1.1 billion euros from 2015.
  • Given the strong rebound last year, the French banking giant once again increased its dividend.
    • Its dividend was raised in February to 2.20 euros per share for 2017, which is $2.34 in dollars at today’s currency rates.  ADR shareholders receive 1/5 of this dividend as the structure is 5 ADR shares represent 1 Société Générale home share. This equates to $0.468 per share for U.S. ADR holders. The dividend ex–date is set on May 20. However,
    • U.S. investors are subject to a French withholding tax of 15%, or $.0702 per share. This reduces the expected dividend, depending on currency translations on the record date, to $.03978.  
    • Given the current price for the stock at $9.20 a share, the current yield is 4.32%. This is well above most U.S banks.  
  • The firm really stands out not just on dividend, but valuation.  
    • Société Générale now trades at a mere 10.2 times expected earnings and a mere 0.6 book value.  U.S. banks, on average, are trading at twice this level in price/book terms and close the market multiple of the S&P 500.  
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