Charles Lewis Sizemore, CFA

About the Author Charles Lewis Sizemore, CFA

Charles Lewis Sizemore, CFA is the founder and principal of Sizemore Capital Management LLC, a registered investment advisor. Charles has been a repeat guest on CNBC, Bloomberg TV and Fox Business News, and has been quoted in Barron’s Magazine, The Wall Street Journal and The Washington Post. He is a contributor to Forbes Moneybuilder, and has been featured in numerous publications and well-reputed financial websites, including MarketWatch, SmarterAnalyst,, InvestorPlace, GuruFocus, MSN Money, and Seeking Alpha. He is also the co-author, along with Douglas C. Robinson, of Boom or Bust: Understanding and Profiting from a Changing Consumer Economy (iUniverse, 2008). Charles holds a master’s degree in Finance and Accounting from the London School of Economics in the United Kingdom and a Bachelor of Business Administration in Finance with an International Emphasis from Texas Christian University in Fort Worth, Texas, where he graduated Magna Cum Laude and as a Phi Beta Kappa scholar. He also maintains the Chartered Financial Analyst (CFA) designation in good standing.

Oh Là Là! Looking For Dividend Yield? Explore France

This is scary time to be investing in Europe. With the Greek debt crisis kicked down the road for another four months, and with most of the Eurozone dangerously close to slipping into deflation, investors have been parking their cash on this side of the Atlantic.

But investors flocking to American shores for the perceived safety are setting themselves up for disappointment, particularly when it comes to dividends. The U.S. is one of the lowest yielding markets in the world at today’s prices. An investment in the iShares Core S&P 500 ETF (NYSEARCA:IVV) will get you a dividend yield of just 1.88%.

Meanwhile, across the Atlantic, you can get a dividend yield 75% higher by investing in French stocks. The iShares MSCI France ETF (NYSEARCA:EWQ), a collection of the largest and most liquid French stocks, yields 3.3% at current prices.

Let’s take a look under the hood at EWQ’s holdings. Though not all of EWQ’s holding are readily available to U.S. investors as ADRs, all of the top ten holdings are available either on the NYSE or over-the-counter.

iShares MSCI France ETF Holdings

U.S. Ticker Name Weight (%) Dividend Yield
SNY SANOFI SA 9.2% 3.9%
TOT TOTAL SA 8.7% 5.1%
AXAHY AXA SA 3.4% 3.8%

At the top of the list, we have French pharma giant Sanofi SA (NYSE:SNY). As a global pharmaceutical company – and as a defensive stock that benefits from aging demographics – Sanofi is relatively unaffected by what happens to the Eurozone economy. It also carries a very modest amount of debt, implying that the company could ride out any turbulence in the credit markets due to a Greek exit from the Eurozone.

Sanofi also sports a nice dividend yield of 3.9%. Unfortunately, we probably can’t expect a lot of the way of dividend growth in Sanofi, as it pays out about 90% of its profits as dividends.

The highest yielder among large-cap French stocks is oil major Total SA(NYSE:TOT). Total sports a 5.1% dividend yield, making it one of the higher yielding global majors. As a point of reference, Exxon Mobil Corporation (NYSE:XOM) yields only 3.0%.

Total, like most of its oil major peers, has made its dividend a top priority, and I consider its dividend safe for the foreseeable future. But with all oil majors slashing investment and divesting assets in this era of low oil prices, I wouldn’t expect aggressive dividend hikes any time soon. Still, a 5.1% dividend yield, even with no growth, is attractive in a market where the 10-year Treasury yields just 2.0%.

Moving down the list, the next big yielder would be insurance giant AXA (OTCQX:AXAHY), with a dividend yield of 3.8%.

Does buying individual French stocks make sense? Well, it certainly could. If you’re bullish on energy stocks, as I am, then Total is certainly a strong contender. But the better option might be to simply buy EWQ and get an entire basket of French stocks. Using data from Research Affiliates, French stocks are priced to deliver vastly superior returns over the next decade. French stocks are priced to deliver real returns of 5.1% per year compared to just 0.4% per year in American stocks. It’s worth noting that French stocks are priced well below their median CAPE valuations, and are priced at about half of American valuations.

It’s also worth noting that France – yes FRANCE – just pushed through a package of significant economic reforms. It wasn’t easy, and French President Francois Hollande had to ram the reforms through over objections from parliament. But any improvement in the French attitude towards business and commerce is a major step in the right direction.

If you’re looking for diversification away from expensive U.S. equities, investing in French stocks via EWQ is a solid option.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, Blogger Charles Sizemore has a total average return of 7.5% and a 67% success rate. Charles Sizemore  is Ranked #284 out of 4239 Bloggers

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