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Tuesday, June 23, 2009
Tim Beyers :: Townhall.com Columnist
Don't Miss This Cheap Stock
by Tim Beyers
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Poll
Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


$22.27

CAPS stars (5 max)

****

Total ratings

393

Percent bulls

95.2%

Percent bears

4.98

Price-to-book

1.51

ROE

14.7%

% Above 52-week low

6.7%

Sources: CAPS.

Those who like France Telecom like it most for its high dividend yield, currently north of 8%. To them, it's like a bond with benefits.

"Given how I think the dollar will perform against the euro (poorly) and the dividend, I'll rate this an outperform," wrote CAPS All-Star jmt587 in December. The stock is down roughly 15% since.

So be it; patience is an enriching virtue with dividend payers. Just ask our Motley Fool Income Investor team. They've been recommending France Telecom -- which they call France's version of AT&T (NYSE: T) -- since January of 2006 and have thus far earned a better-than-11% total return, thanks entirely to dividends. (The stock trades for less today than it did when it was first recommended.)

Today, France Telecom trades for about 10 times trailing earnings. By itself, I wouldn't place much stock in the company's P/E. Mix in a meaty yield and France Telecom strikes me as a likely market-beater, and I've rated it as such in my own CAPS portfolio.

But that's also just my take. What would you do? Would you buy shares of France Telecom at today's prices? Let us know by signing up for CAPS today. It's 100% free to participate.

More bargain basement Foolishness:

last litter of cheapskates.See what John Bogle has to say about buy and hold investing.Read this before you sell even one share.

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About The Author

Tim Beyers is a freelance writer and PR and marketing consultant.

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