The Best French Dividend Stocks

Last Updated on January 18, 2021 by Oddmund Groette

France has many high-quality companies: Who have not heard of L’Oreal, LVMH, Schneider, or Sanofi? Both the CAC-40 and the CAC Mid-60 contain many high-quality companies that pay a stable or rising dividend. Moreover, many companies are controlled or run by a family who has real skin in the game.

This article looks at the companies in the CAC-40 and the CAC Mid-60. Only companies that we consider the most interesting are included in this article. At the bottom, you find a complete list of all the 61 dividend-stocks we have picked.

We don’t guarantee the accuracy of the data we have accumulated. Many sources are used, however, mainly taken from annual reports over many years. As always, do your own due diligence. This article is no investment advice.

French withholding taxes

Only the UK, Singapore, and Hong Kong have zero withholding taxes among the biggest stock markets. Dividend taxes are, in reality, double taxation of the same profits, so you need to know how much your broker withholds from the dividend payments. The broker later transfers the withheld money to the local IRS.

France used to have a high withholding rate. However, it has been reduced from 2019. This is what Air Liquide, one of the most stable French dividend payers, writes about withholding taxes:

Taxation of dividend in France for those residing outside france for tax purposes (for French tax residents): a statutory rate equal to at least 12.8% is withheld upon dividend payment by your account manager.

However, in most cases, a tax agreement (treaty between two countries aimed at avoiding the double-taxation of non-residents) is signed between France and your country of residence. The main aim of this agreement is to set a flat tax rate which is withheld from your dividends. To benefit from this rate, you must send Form 5,000 (corresponding to the request to apply the rate adopted in the agreement), completed and signed by the tax authorities of your place of residence, to your account manager by mid-April. This Cerfa form can be downloaded from impots.gouv.fr. It must be resent to your account manager each year, otherwise the statutory rate will be applied upon payment of the dividend.

We only own French stocks as ADRs – not directly – and can’t help you answer questions related to the withholding tax and how it’s done in practice.

The pros and cons of dividend investing:

Taxes are a real drag on the returns and one of the major arguments against dividend-investing. The other downside is the drag on reinvesting the dividend above book value, unless you consume the dividend, of course. To get a better understanding of dividend investing, we suggest you read all our articles about dividend investing (to make sure you understand the pros and cons):

French dividend frequency:

Most of the biggest companies that pay a regular dividend pay twice a year: an interim dividend and a final dividend. However, the vast majority still pay once per year.

The French dividend culture:

The Anglo-Saxon has a long culture for “rewarding” the shareholders with dividends, but less so in France. The aim of paying a steady dividend is not as important, and only a very few companies accomplish that. To our knowledge, only two companies have paid a rising dividend for 25 years in a row and thus qualifies for the US Dividend Aristocrat list: Sanofi and LVMH.
However, the FIRE movement has gained momentum (Financially Independent, Retire Early), and they often look for dividends as their main source of “income”. The interest rates are at a record low, and many have switched from bonds to dividend stocks. We recommend being cautious, relying on dividends as the primary source of “income”. Please make sure you understand the pros and cons of dividend investing!

How do you buy French stocks?

Most of the “best” and most reliable dividend payers can be bought as ADRs on the NYSE and NASDAQ. Many more are traded “unofficially” on the OTC-market. Today, almost all brokers worldwide have access to US markets. Thus, the easiest way to buy French stocks is via ADRs. However, some brokers have direct access to a wide range of markets, such as Interactive Brokers.

The most stable French dividend payers:

Below is a very short description of which companies we consider the most solid dividend-companies in France:

Air Liquide:

As the name suggests, Air Liquide is involved in many forms of gases, mainly industrial. It’s diversified both in terms of products and geography. The industries they serve are not only chemical plants but also other industries like automotive, healthcare, semiconductors, energy, food, etc. The stock has returned 11.4% with dividends reinvested since 2003, which is significantly above the CAC-40 index.  The business model is somewhat “recession-proof”.

The dividends have been kept steady or increased for a long time:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Air Liquide 1.93 2 2.25 2.25 2.25 2.35 2.5 2.5 2.55 2.55 2.6 2.6 2.65 2.65 2.7

The payout ratio is normally around 40-60%.

bioMérieux:

The company is a multinational biotechnology company and is present in over 44 countries worldwide. The main products are diagnostic instruments and software. Its products are used in both the healthcare sector, the food industry, and the cosmetics sector.

The dividend has been stable, but it was lowered because of the Covid-19:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Biomerieux 0.46 0.76 0.76 0.81 0.92 0.98 0.98 0.98 1 1 1 1 1.02 1.05 0.57

About 20-40% of the earnings are normally paid out as dividends.

Bollore:

As with many French companies, Bollore is family-controlled. It’s an investment company with assets in the paper industry, energy, plantations, and logistics. The dividend has been almost doubled over the last 15 years, a growth slightly higher than the inflation rate:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bollore 0.0036 0.0072 0.011 0.011 0.013 0.03 0.033 0.31 0.031 0.041 0.06 0.06 0.06 0.06 0.06

The BoD keep the payout ratio in the 50-70% region.

Bonduelle:

The company is producing (mainly) processed vegetables and is controlled by the Bonduelle family.

The company is a mid-cap but it has nevertheless never lowered its dividend for a long time:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bonduelle 0.28 0.3125 0.3375 0.375 0.375 0.375 0.375 0.375 0.38 0.38 0.43 0.43 0.45 0.5 0.5

The payout ratio is quite low, normally below 30% of the earnings.

Bougyues:

This is a family-controlled company and has three main segments: real estate construction/development, media, and telecom.  The dividend has been steady since 2005:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bougyues 0.9 1.2 1.5 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.7

Bougyues’ payout ratio is normally above 50%.

Danone:

Danone is a multinational food company. It’s one of the world’s biggest with sales in over 120 countries worth more than 25 bn EUR. Because of its predictable business model, the dividend has grown at a rapid pace over the last years:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Danone 0.425 0.5 1.1 1.2 1.2 1.3 1.39 1.45 1.45 1.5 1.6 1.7 1.9 1.94 2.1

Dassault:

This is a conglomerate/investment company controlled by the Dassault family. It was originally an aviation company but has diversified into a wide range of industries: software, electric cars, media (Le Figaro), real estate, and smaller investments.

Dassault’s dividend has grown 8.4% annually since 2005:

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dassault 0.21 0.22 0.23 0.23 0.23 0.27 0.7 0.8 0.83 0.43 0.47 0.53 0.58 0.65 0.7

EssilorLuxottica:

EssilorLuxottica is a merger of the French Essilor and the Italian Luxottica in 2018. Essilor manufactures lenses to correct eyesight, while Luxottica owns eyewear brands such as Ray-Ban and Oakley.

Essilor has paid a rising dividend all the way up to the Covid-19 mess when it was canceled. The dividend has resumed in 2020:

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Essilor 0.94 1.1 0.62 0.66 0.7 0.83 0.85 0.88 0.94 1.02 1.11 1.5 1.53 2.04 0

Hermes:

Hermes is yet another French manufacturer of luxury goods, mainly in leather, accessories, home furnishing, perfumes, jewelry, and watches.

The dividend has been increased for a number of years:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Hermes 0.83 0.95 1 1.03 1.05 1.5 2 2.5 2.7 2.95 3.35 3.75 4.1 4.55 4.55

About 30-40% of the earnings are paid out as dividends.

Kering:

This is the company founded by the Pinault family, and they still have control. The name Kering was established in 2013 when it decided to focus solely on luxury goods. The dividend has been raised substantially since 2005:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Kering 2.72 3 3.45 3.3 3.3 3.5 3.75 3.75 3.75 4 4 4.6 6 10.5 8

Klepierre:

The company is a REIT and the second biggest public mall operator in the EU. The biggest shareholder is the US Simon Property Group (SPG).

The dividend has been raised or held steady every year since at least 2005:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Klepierre 0.9 1.07 1.25 1.25 1.25 1.35 1.45 1.5 1.55 1.6 1.7 1.82 1.96 2.1 2.2

Because it’s a REIT, most of the profits are paid out as dividends.

L’Oreal:

L’Oreal is a personal care company, the world’s largest cosmetics company, and is controlled by the Bettencourt family. The main products are skincare, make-up, and perfume.

The dividend has been raised for over 25 years in a row until it was held steady in 2019:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
L’Oreal 0.95 1 1.18 1.38 1.44 1.5 1.8 2.3 2.5 2.7 3.1 3.3 3.55 3.85 3.85

Most of the earnings are paid out as dividends. L’Oreal usually trades at very high earnings multiples.

LVMH:

The full name is LVMH Moët Hennessy Louis. It’s a conglomerate and a result of many mergers over many decades. The current structure origins back to 1987 when Louis Vuitton merged with  Moët Hennesy, which is producing champagne and cognac. The business segments are fashion, wines and spirits, perfumes and cosmetics, watches and jewelry, selective distribution, and other activities.

The dividend has been raised every year for a long time:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
LVMH 1.15 1.4 1.6 1.6 1.75 2.2 2.9 3 3.15 3.3 3.6 4.2 5.4 6.2 6.8

The payout ratio is normally between 40-50% of the earnings.

Pernod Ricard:

Pernod Ricard is a sin-stock and can trace its history back to the 1800s. It’s controlled by the Ricard family. The company produces and distributes alcohol, and the most famous brands include Chivas Regal, Beefeater, Absinth, Absolut, Jameson, Ballantine’s, etc.

Pernod Ricard has not lowered the dividend for many decades, but it’s been kept steady at occasions, lately in 2014:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Pernod Ricard 0.92 1.05 1.26 0.66 0.5 1.34 1.44 1.58 1.64 1.64 1.8 1.88 2.02 2.36 3.12

The payout ratio is normally around 50%.

Remy Cointreau:

This is a family-controlled sin-stock that can trace its origins back to 1725. The most famous brands include Remy Martin, Loius XIII, and Metaxa.

The dividend is slowly rising over time:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Remy Cointreau 1.1 1.2 1.3 1.3 1.3 1.3 1.3 1.4 1.27 1.53 1.6 1.65 1.65 1.65 1

The table doesn’t include bonus dividends: in 2010, 2011, and 2018 an extra dividend of 1 EUR was paid out each year. Normally about 50-70% of the earnings are paid out as dividends.

Rubis:

Despite being somewhat cyclical, Rubis has managed to increase its dividend for at least 15 years in a row:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Rubis 0.465 0.535 0.6125 0.6625 0.7125 0.7625 0.835 0.92 0.975 1.025 1.21 1.34 1.5 1.59 1.75

Rubis operates in the storage and distribution of petroleum and liquified petroleum gas (LPG). Moreover, it has business segments for food and chemicals. It has a diversified business model.

Sanofi:

Sanofi is a pharmaceutical company, one of the world’s biggest. The company has perhaps the best dividend track-record in France dating back many decades:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sanofi 1.52 1.75 2.07 2.2 2.4 2.5 2.65 2.77 2.8 2.85 2.93 2.96 3.03 3.07 3.15

Sanofi’s payout ratio has historically been in the 60-80% range.

Schneider Electric:

Schneider is a competitor of the better-known German company Siemens. The business is electrics, energy and automation. The business model is diversified, and thus the company has managed to raise the dividend substantially, although it was lowered in 2009 after the GFC:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Schneider 1.11 1.5 1.65 1.73 1.03 1.6 1.7 1.87 1.87 1.92 2 2.04 2.2 2.35 2.55

The payout ratio is in the 50-70% range.

Scor SE:

Scor is the world’s fourth-largest reinsurer and have managed to keep a stable and growing dividend:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Scor 0.5 0.8 0.8 0.8 1 1.1 1.1 1.2 1.3 1.4 1.5 1.65 1.65 1.75 1.8

Scor’s payout ratio is normally between 50-60%.

TFF-Group:

This is rather small family-controlled company operating in the sin-business, but not by producing sin-products. The main products are foresting, cask making (for alcohol), stave milling, and stainless steel making. It’s a stable business reflected in the dividend:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
TFF 0.115 0.125 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.2 0.2 0.2 0.35 0.35 0.35

The payout ratio is conservative: around 20%.

Wendel:

Wendel is an investment company where the most famous subsidiary probably is Bureau Veritas. Most likely you can expect the dividend to grow at the rate of the inflation rate plus some:

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Wendel 2 2 2 1 1 1.25 1.3 1.75 1.85 2 2.15 2.35 2.65 2.8 2.8

Other dividend stocks:

We have collected data for a number of other potentially interesting dividend-stocks. As we wrote at the beginning of the article, we don’t take any responsibility for any errors in the table:

Conclusion:

France has many quality companies which makes the case for international diversification appealing, especially for investors based in markets that are either small or concentrated toward a narrow base of industries.

We end the article by reminding investors not to fall prey to the dividend bias. A dividend is only a distribution of earnings and retained earnings. At the end of the day, it’s the total returns that matter.

 

Disclosure: We are not financial advisors. Please do your own due diligence and investment research or consult a financial professional. All articles are our opinion – they are not suggestions to buy or sell any securities. 

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