European Dividend Stocks to Buy

Posted by D4L | Wednesday, April 16, 2014 | | 0 comments »

Here’s a stat that could shape where you look for dividend stocks in the near future: Spanish bond yields are sitting near 200-year lows. Yes, 200, as in two centuries. The last time Spain had yields this low, Napoleon had only recently been exiled to Saint Helena. The Spanish 10-year government bond now yields 3.26%. As recently as a year ago, yields were over 5%. And Spain’s not alone; 10-year yields in France (2.1%), Italy (3.3%) and even Ireland 3.0%) are sitting at levels no one would have believed a year ago: 2.1%, 3.3% and 3.0%.

European stocks are also much cheaper than American equities, based on the most recent cyclically adjusted P/E ratio figures. According to data just released by Meb Faber’s Idea Farm, Ireland, Austria, Italy, Spain, the U.K. and France all trade at CAPEs of 8.4 to 14.4. The U.S. market trades hands at a CAPE of 25.4. The combination of cheaper valuations and a more favorable monetary regime should make European stocks the better bet over the next several years. So with that said, today I’m going to recommend three solid European dividend stocks that I expect will generate significantly better total returns than the S&P 500. European Dividend Stocks to Buy: Telenor ASA (TELNY), Total SA (TOT) and Telefonica (TEF).

Source: InvestorPlace

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