opportunities europe

[Arnaud]

Are there any good opportunities at the moment at the European level to be able to put this in a PEA (I don't know if it also exists in Switzerland)?

[Jerome]

Unfortunately I can't find growing dividends as good in Europe as in the United States.
The only title that holds up a little to comparison is Sanofi.

PEAs do not exist under this name in Switzerland, but I imagine that it is a bit like a 3rd pillar, tax-free, to finance a retirement. You can buy investment funds on this type of account, linked to stocks/bonds.

[Arnaud]

It is tax-free but in return if you withdraw the money before a certain number of years it closes automatically and is reserved for European shares.
Well, on a dividend strategy, we don't care about the blocking.

Hence the interest in putting European shares in it.

But I can't find anything that holds up in terms of payout ratio in Europe.

[spark]

Good morning,

For Europe it seems that it is possible to start from S&P Europe 350 Dividend Aristocrats. It offers a list of companies with a minimum capitalization of 3 billion and increasing their dividends for 10 years. Here is the list retrieved today

30-May-2012 Constituent Name Constituent Symbol
AMEC AMEC
Abertis Infraestructuras SA ABE
Aggreko AGK
Associated British Foods ABF
AstraZeneca Plc AZN
Atlantia SpA ATL
BAE Systems Plc BA/
BHP Billiton Plc BLT
British American Tobacco Plc BATS
Bunzl BNZL
Capita Group CPI
Centrica CNA
Cobham COB
Compass Group CPG
Danone BN
Diageo Plc DGE
Fresenius Medical FME
GlaxoSmithKline GSK
Hermes Intl RMS
Imperial Tobacco IMT
Johnson, Matthey JMAT
Kerry Group A KYG
Royal KPN NV KPN
L'Oreal OR
Nestle SA Reg NESN
Novartis AG Reg NOVN
Novo Nordisk AS B NOVOB
Novozymes AS B NZYMB
Pearson PSON
RSA Insurance Group Plc RSA
Red Electrica Corporacion SA REE
Roche Hldgs AG Ptg Genus ROG
Royal Dutch Shell PLC RDSA
Sage Group SGE
Sanofi-Aventis SAN
Scottish & Southern Energy SSE
Serco Group SRP
Swedish Match AB SWMA
Tesco TSCO
Vodafone Group VOD

For my part, I retrieve my lists of companies from businessweek (being a programmer it helps ).
It may be interesting, as Philippe Proudon (the happy investor) points out, to look at two ratios: gross margin > 60%, which indicates what Buffet calls pricing power, and the Capital expenditure / operating result ratio in addition to the ratios cited by Jérôme.

For my part, I already apply a filter when I retrieve the list of companies. I eliminate of course those which do not pay any dividends, those which are less than 10 years old, those which are listed on a market not accessible by my bank/broker.

[Jerome]

I know the S&P European Dividend Aristocrats well, which undeniably contains some excellent stocks.
I also have some of them in my portfolio
The problem with these stocks is that many of them cannot demonstrate a dividend growth history as good as US stocks.
That doesn't mean they're bad, just that the strength of growing dividends is a little less clear.

[Phil]

Good morning,

I confirm the difficulty in finding good companies with a long history of increasing dividends for a PEA.
It is true that you can choose European companies, but be careful with the withholding tax on the dividend: in many foreign countries, when the dividend is paid, a withholding tax is levied (generally around fifteen %).
Within the framework of a securities account, one can benefit from a tax credit allowing one to recover part (or all depending on the country) of the withholding tax.
But in a PEA, you are not entitled to it: this deduction is lost…

Sincerely,

[spark]

Good morning,

It still seems to me that we should try to diversify the sources of dividends in monetary terms. I heard an interview yesterday with Delamarche who advised this diversification given the current turbulence. Anything in USD or Euro can present a danger in the event of a currency crash.

What do you think?

Sincerely

[Phil]

Good morning,

Of course you have to diversify, but with a PEA it's very difficult when you're focused on dividend aristocrats:
– FR shares do not have a strong dividend history, but the advantage is that there is no withholding tax on dividends.
– some European stocks are very nice but the withholding tax on dividends hurts in the context of a PEA. -10% -15% on your return…

And it is not possible to have US shares in a PEA, only European ones.

Sincerely,

[Jerome]

I have long racked my brain over the problem of the lack of good dividend-growing stocks outside the US and the currency risk (USD)

I talk about it in my series of articles which starts here

The best thing I've found so far is to pick US stocks that benefit from a weak dollar (multinationals and commodities sector)

[Author]

Posts