2 High Dividend European Blue Chips Worth Owning
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The economic situation in Europe is ugly and won’t be improving any time soon. Greece is facing a default, Spain’s rescue package fell apart, and Italy’s already moved onto the bailout horizon. But when the stock price of a strong blue chip company falls solely because the entire financial market is heading south, it can open up a golden opportunity for investors willing to buy and hold.
Siemens AG (NYSE: SI)
It shouldn’t surprise anyone that a German company is standing strong in these turbulent markets. Siemens AG, headquartered in Munich, is the country's leader in electrical engineering and electronics. The company has diversified into the industrial, healthcare, financial services and energy sectors, giving it added financial protection in market downturns.
Siemens is down about 40% from their 52-week high of $138.46 and currently trades in the low eighties range. But don’t let this deter you. Siemens reported $10.56 billion in cash at the close of their March 31, 2012 quarter, has a P/E ratio of 13.14, and for value investors, a price-to-sales ratio of .81. The company has a market cap of $74.42 billion and offers a generous dividend yield of 4.71%.
Siemens has an impressive earnings-to-growth ratio of .38 to satisfy the most discerning growth investor. The earning-to-growth ratio takes into account a company’s earnings growth when determining a stock’s value, and for this ratio, the lower the number, the better it is. As a benchmark, an earnings-to-growth ratio of 1 is acceptable; Siemen’s carries a very low .38 earnings-to-growth ratio. This bullish indicator is all the more remarkable considering the current worldwide depressed economic conditions.
Total SA (NYSE: TOT)
French oil giant Total SA operates in all three aspects of the petroleum industry: upstream, downstream and chemicals. Upstream, the company is involved in oil and natural gas exploration, development and production; downstream includes the refining, marketing, trading and shipping of their petroleum products; and their chemical aspect includes petrochemical and fertilizer activities.
At a time when companies are cutting or eliminating their dividend payments, Total SA offers investors a steady and very impressive dividend yield of 6.99. The company has a market cap of $102.54 billion, and as reported at the quarter ending March 31, 2012, $16.71 billion in cash. Total SA has a P/E ratio of 5.84 and has an estimated five year earnings-to-growth ratio of 1.77. The stock is currently trading around $43, and the 52-week range is $40.00 - $58.25.
Although operating in different countries and industries, Siemens and Total SA both share the same traits: conservative company management, ample cash reserves on hand, and operational diversification. Investors looking for safety combined with strong growth and income potential in companies paying generous dividends might want to consider adding Siemens and/or Total SA to their stock portfolios.
Fool blogger Karen Rogers does not own shares in any of the companies mentioned in this entry. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Total SA. (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
