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8 High-Quality, Dividend-Paying European Stocks Trading Cheaply

4. Novartis (NVS - Get Report)

Company profile: Switzerland-based Novartis, with a market value of $125 billion, is one of the world's largest drug makers. Its products include branded and generic pharmaceuticals, vaccines, as well as eye care and consumer products.

Dividend Yield: 4.82%

Investor takeaway: Its shares have a forward P/E of 9.2, and a current 14.6 versus its peers' 14.1. S&P analysts say that "Novartis is well positioned in branded drugs, as well as in generics, consumer health, eye care, vaccines, and diagnostics. Diversification has been achieved largely through acquisitions, the most recent being Alcon, a leading maker of ophthalmic drugs, devices, and consumer eye care products. Share prices are down 5.6 % this year, but have a 10-year, average annual return of 4.7%. Analysts give its shares four "buy" ratings, one "buy/hold," three "holds," and one "weak hold," according to a survey of analysts by S&P.

3. ABB (ABB - Get Report)

Company profile: ABB, with a market value of $36 billion, is a Switzerland-based holding company provides power and automation technologies designed to improve performance while lowering environmental impacts.

Dividend Yield: 4.48%

Investor takeaway: One of the world's largest power infrastructure systems providers, selling to utilities and industrial users, its shares have a forward price-to-earnings ratio of 9.5 and a current P/E of 11.2 versus its peers' 14.9. They are down 13.5% this year, but have a 10-year, average annual return of 7.5%. Analysts give its shares six "buy" ratings, one "buy/hold," four "holds," and one "weak hold," according to a survey of analysts by S&P.

2. Royal Dutch Shell (RDS.A)

Company profile: Royal Dutch Shell, with a market value of $201 billion, is one of the largest energy companies in the world, with exploration, production, and refining operations worldwide.

Dividend Yield: 4.75%

Investor takeaway: Its shares have a forward P/E of 6.5 and a 6.2 current P/E versus its industry's average of 7.6. Their price is down 14% this year, but they have a 10-year, average annual return of 5%. Analysts give Shell's shares six "buy" ratings, two "buy/holds," and six "holds," according to a survey of analysts by S&P.

Analysts estimate that it will earn $9.23 per share this year and that that will grow by 7% to $9.89 next year. S&P has it rated "hold," with an $83, 12-month, price target, which is a 36% premium to the current price, noting its strong reserves of oil internationally coupled with the uncertain economic environment.

1. Covidien (COV)

Company profile: Dublin, Ireland-based Covidien, with a market value of $25 billion, develops, manufactures, and distributes medical and imaging devices, pharmaceuticals, and other health-care products worldwide.

Dividend Yield: 1.76%

Investor takeaway: It has a forward P/E of 11.2% and a current P/E of 12.7% versus its industry's average of 20. Its shares are up 15% this year and have a three-year, average annual return of 14%. Analysts give its shares 13 "buy" ratings, six "buy/holds," and three "holds," according to a survey of analysts by S&P. S&P has it rated "strong buy" with a $66 price target, which is a 30% premium to the current price. It says: "We see double-digit earnings per share growth over the long term, led by its portfolio optimization, with emphasis on the device segment, new products and cost control."
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
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SI $0.00 0.00%
COV $106.71 -1.26%
ABB $17.03 0.00%
CS $13.82 0.00%
NVS $72.70 0.00%


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