1. France Telecom (NYSE: FTE  )
France Telecom is exactly what you think it is: France's answer to America's AT&T or Verizon. The company provides land-line, cell-phone, Internet, and cable television service to consumers and businesses throughout France, the U.K., Spain, and Poland. By the numbers:

• We like to see dividend yields of around 3%: an arbitrary threshold, but one we think separates the wheat from the chaff. France Telecom's dividend is a staggering 13%, and even though it appears that its dividend will get cut in coming years, it will still represent a high yield. Vodafone (Nasdaq: VOD  ) , the U.K.'s answer to France Telecom, pays a 3.5% yield: normally pretty good, but not compared with France Telecom.
• We like to see dividend-payout ratios of 50% or less: The lower the percentage, the more sustainable. At 86%, France Telecom's might seem high, but with its dominant market position in France and surrounding countries, it almost falls into the category of a public utility. Payout ratios of such companies can go significantly higher than normal and still remain sustainable.
• Gross margin is an indicator of brand strength, pricing power, and management and manufacturing efficiencies -- factors that directly affect the bottom line. With a gross margin of 42% over the past 12 months, France Telecom has an almost 10-point edge against Vodafone. The less money a company spends upfront, the more profit is left over at the end.