Sorry about the double post, I think it helps to the reader more then overly long posts.
Wiki has a decent write-up about the Dividendum
Dividends are not created of course equal.
The Deutsche Telekom AG is an interesting case. It does not divide the earnings of the company but the earnings + the capital. If a company earns over the last 7 years something like 0,5 per share but pays out a bit more then 0,7 something is usually very wrong. At least for the investor and 8,5€ per share certainly don't look cheap from this angle alone. ( At a low enough share price a disinvesting business could be quite attractive)
The France Telecom looks different. Over the last 7 years it has paid out 1,3€ per share while earning roughly 1,7 €. That is a high proportion and might be a bit too much as the shareholder might have had a higher return from higher amount of retained capital*. Quite recently FT has decided to cut the dividend to 0,8€ for 2012 and 2013. Earnings have suffered a bit but they should be higher then 1,2 IIRC for 2012. At a price of ~ 8€ the dividend yield is very high, at least before the dreaded taxes. It is certainly remarkable that in a world without taxes a shareholder with 1 share could have bought another one 7 years later just with the dividends. (No inflation and investment taken into account) Of course in this case he might be not too happy as he invested into this first share somewhat over 20€.
The first stock is not worth a second look, as time is precious, but the second one might be well worth the time even with those wicked French socialists² in power.
*A business typically needs to invest more then the depreciation takes just to keep it's current position to it's competitors.
²They leave you just 60% of your dividend while the dear US takes less the 30% away...
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