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I am happy to announce that my friend Tim Du Tiot will now be writing articles for the site. Tim is based out of Germany and offers a unique European perspective to value investing.

Tim du Toit is editor and founder of Eurosharelab. On his website he reveals what more than 20 years of equity investment have taught him – sometimes at considerable cost. To discover how you can avoid costly mistakes and enjoy greater profits, sign up for his free newsletter “Investing that makes sense” at www.eurosharelab.com

In May each year, after publication of the annual results, I publish a list of the large companies in Europe with the highest dividend yields.

This article is an update on the performance of the 13 May 2010 article that can be found here:

Europe’s highest dividend yields 2010 – 13 May 2010


The performance of the top dividend payers has been very good with both the top 10 and my selection outperforming the European STOXX 600 index.
The top 10 European highest dividend payers generated an average return (including the dividend) of 9,3% outperforming the European STOXX 600 index 5,4%.

This is higher than my selection which returned and average of 6,9% also outperforming the STOXX 600 index by 3,1%.

The top performer, up nearly 41%, was Seadrill, the Norwegian contract drilling company. Of course the company I did not select.

And the worse performer BP Plc, down 17,7% due to the explosion of its drilling platform in the Gulf of Mexico.

Surprising was the poor performance of the German electricity utilities E.ON (-6,4%) and RWE (-13%) down nearly as much as BP. These declines were most likely caused by tax uncertainty in Germany, specifically around the special tax on nuclear power stations.

I think the decline is completely overdone and RWE with a current yield of 7,25% and E.ON at 6,74% are both really attractive.
Source: Financial Times

Here is the complete table of returns:

:

My Pics Name Price Industry Dividend yield (%) 13.05.10 Total Return Performance against STOXX 600 Index Price 02.12.10
1 DEUTSCHE TELEKOM AG-REG 8.80 Telephone-Integrated 8.9 21.9% 18.1% 9.95
2 FRANCE TELECOM SA 16.15 Telephone-Integrated 8.7 5.7% 1.9% 15.67
3 VIVENDI 18.13 Multimedia 7.7 15.2% 11.3% 19.48
SEADRILL LTD 147.70 Oil&Gas Drilling 6.9 40.8% 36.9% 197.7
BP PLC 549.20 Oil Comp-Integrated 6.7 -13.8% -17.7% 436.15
ENEL SPA 3.83 Electric-Integrated 6.5 1.8% -2.0% 3.65
SCOTTISH & SOUTHERN ENERGY 1077 Electric-Integrated 6.2 9.7% 5.8% 1114
ENI SPA 16.47 Oil Comp-Integrated 6.1 0.2% -3.6% 15.51
4 ROYAL DUTCH SHELL PLC-B 1816 Oil Comp-Integrated 6.0 14.8% 10.9% 1975
NATIONAL GRID PLC 608 Electric-Transmission 6.0 -3.4% -7.3% 550.5
5 E.ON AG 25.32 Electric-Integrated 6.0 -6.4% -10.2% 22.2
6 RWE AG 59.58 Electric-Integrated 5.9 -13.0% -16.9% 48.3
7 GDF SUEZ 25.87 Electric-Integrated 5.8 5.4% 1.6% 25.77
8 TOTAL SA 40.23 Oil Comp-Integrated 5.7 -1.6% -5.5% 37.29
9 VODAFONE GROUP PLC 139 Cellular Telecom 5.7 24.0% 20.2% 164.55
10 TELEFONICA SA 17.20 Telephone-Integrated 5.4 3.3% -0.5% 16.83
MUENCHENER RUECKVER AG 106.00 Reinsurance 5.4 9.1% 5.2% 109.85
BANCO SANTANDER SA 9.50 Commer Banks Non-US 5.1 -12.6% -16.4% 7.82
GLAXOSMITHKLINE PLC 1187.5 Medical-Drugs 5.1 8.0% 4.1% 1222
DEUTSCHE POST AG-REG 11.93 Transport-Services 5.0 9.0% 5.2% 12.41
ASTRAZENECA PLC 2850 Medical-Drugs 5.0 11.1% 7.2% 3032.5
ALLIANZ SE-REG 83.03 Multi-line Insurance 4.9 9.0% 5.1% 86.37
TELECOM ITALIA SPA 1.03 Telephone-Integrated 4.8 -1.0% -4.8% 0.97
BRITISH AMERICAN TOBACCO 2069 Tobacco 4.8 17.9% 14.1% 2340
BAE SYSTEMS PLC 339.6 Aerospace/Defense 4.7 1.2% -2.7% 327.6


If you are still not convinced of the benefits of investing in high dividend paying companies this will be worth your time.
Tweedy Browne, the well known value investment management company has published an excellent research report on their website that summarises all the research on high dividend investing in one place.

The paper can be found in the Research and Reports part of their website and is called:

The High Dividend Yield Return Advantage:
An Examination of Empirical Data Associating Investment in
High Dividend Yield Securities with Attractive Returns Over
Long Measurement Periods. (PDF)

My previous European high dividend yield articles can be found here:

Europe’s highest dividend yields 2010 – 13 May 2010

Europe’s highest dividend yields 2010 – Update – 5 November 2009

Europe’s highest dividend yields 2009 – 22 May 2009


Happy dividend hunting

Tim du Toit