Published by: Elise Caradec — Editor specializing in stock exchange
Investing in CAC 40 companies to earn regular revenues is a strategy that many savers are looking for. However, running after the highest yield does not guarantee a successful placement. If some companies have rates exceeding 7% or 8%, it is necessary to distinguish an exceptional distribution from a sustainable remuneration policy. Understanding the mechanisms of secondment from the coupon and identifying structurally generous sectors makes it possible to build a portfolio resilient to market fluctuations.
The CAC 40 yield rankings
The return on a share is calculated by dividing the amount of the annual dividend by the share price. This figure is moving: if the course of action drops, the mathematical yield increases, which can send a misleading signal. Here are the values that dominate the current ranking within the Parisian index.
| Company | Sector | Estimated yield | Stability |
|---|---|---|---|
| Energy | Energy | 9,5 % – 10,5 % | Variable |
| Stellantis | Automobile | 7,5 % – 8,5 % | Cycling |
| Agricultural credit | Bank | 7 % – 8 % | Rugged |
| Société Générale | Bank | 6,5 % – 7,5 % | Conditional |
| TotalEnergy | Energy | 5 % – 6 % | Crescent |
The energy and banking sectors are at the top of the table. Banks, after being forced by regulators, have resumed generous distributions. On his side, TotalEnergy remains a core portfolio value thanks to its ability to increase its coupon on a regular basis for several decades.
Mechanics of the dividend: secondment and taxation
To collect a dividend, you must hold the share on the day before the date of secondment. On the day of payment, the share price mechanically decreases the amount of the dividend. This operation is neutral for your heritage in the short term, but the ability of the action to fill this detachment determines your actual performance.
Tax optimization: PEA or securities account
The choice of support impacts your net yield. In an ordinary securities account, dividends are subject to the Flat Tax of 30%. In contrast, the Share Savings Plan provides an income tax exemption after five years of holding, with only 17.2 per cent of social contributions outstanding. For an income-based strategy, the EAP is the ultimate optimisation tool, as it allows coupons to be reinvested without immediate tax friction.
Immediate return vs dividend growth
There are two opposing strategies. The first seeks immediate yield (Yield). The second favours companies that increase their dividend each year (Growth). Companies like LVMH or Air Liquide offers more modest facial returns, often between 1.5% and 2.5%, but their steady growth offers a high return on purchase cost over the long term.
The investor must balance his immediate income needs with the need to protect his capital against inflation. Only double-digit yields, often synonymous with the risk of coupon cutting, are perilous. It is preferable to integrate growth values whose dividend will progress over time to ensure the sustainability of your purchasing power.
Criteria for judging the quality of a dividend
High yield can hide a « dividend trap ». If a company distributes more than it earns, or if its price collapses due to degraded fundamentals, the dividend is in danger. Three indicators are used to analyse the strength of a distribution.
The Payout Ratio
The payout ratio measures the share of net profit paid to shareholders. A ratio of 40% to 60% is healthy. If it exceeds 80% or 100%, the company no longer retains enough cash to invest in its growth. Listed land is an exception because its tax status requires it to distribute a large part of its rent.
Free Cash Flow
Accounting profit can be manipulated, but cash flow is a tangible reality. It is with the cash available, after paying the expenses and investments, that the company finances its dividends. A company with an increasing profit but a negative cash flow often struggles to maintain its payments over time.
Payment history
Some companies make the dividend a pillar of their communication. Air Liquide, for example, practises the allocation of free shares and proposes a 10% loyalty premium on the dividend for shareholders on the nominative. Analysing the history over ten years, especially during the crises of 2008 or 2020, makes it possible to judge the reliability of the management.
Leading sectors and outlook
CAC 40 reacts differently to business cycles, affecting the distribution capacity of businesses.
The sector luxury (LVMH, Hermès, Kering) has low yields but high growth. The dividend is a bonus on latent surplus value. Energy and raw materials (TotalEnergies, ArcelorMittal) offer high dividends but high volatility due to commodity prices. Health, with actors like SanofiThis group has increased its dividend for more than 20 years. Finally, telecoms and utilities (Orange, Engie) offer recurring returns, although their potential to increase is limited by a high capital intensity.
Diversify your portfolio over at least three or four sectors to compensate for a dividend drop in one area by the stability of another. The dividend is only one component of the overall performance. Focusing only on the coupon without looking at the company's financial health is a mistake that experienced investors avoid.