Many corporations seem to treat their shareholders like children -- parceling out dividends and share buybacks like allowances and admonishing them that "they know best." Not so with French oil company Total SA (NYSE:TOT).

While this diversified oil company certainly keeps enough cash on hand to invest in expanding the business, management seems more than willing to treat shareholders like the co-owners they are and pays out a healthy percentage of its capital in the form of dividends and share repurchases. This contributed to Mathew Emmert's reasoning when he recommended the firm for Motley Fool Income Investor subscribers.

Sales in the fourth quarter climbed 27% on a 2% increase in production. Although Total's sales were hurt by lower-than-expected production and a strong euro, high oil prices and strong refining margins more than compensated.

Stripping out one-time gains and charges, Total posted a 58% increase in operating profits to more than $6.6 billion. It should be noted, though, that Total's results are reported under French generally accepted accounting principles and are accordingly not strictly comparable with U.S. results.

Part of Total's success is due to wide-ranging partnerships and investments, and the company has no plans to curtail those activities. For the full year of 2004, Total invested more than $11 billion in new projects around the world.

Investors shouldn't think, though, that Total's management is simply spending money because it can. The company is also doing a commendable job of returning capital to shareholders. Not only has management hiked the dividend by 15%, but also the company spent about $1.3 billion dollars on share buybacks in the fourth quarter alone. For the full year, Total reported 3% fewer shares outstanding because of the extent of its buybacks.

Although the company failed to meet management's production goals for both the fourth quarter and full year, management is sticking with a goal of 4% annual production growth through the end of the decade. While the company's 2% production rate and 2% decline in proven reserves for 2004 suggests that this could be a bit challenging, Total has a good history of above-average production, so management probably deserves the benefit of the doubt.

Investors can also take heart in the fact that Total has a lower break-even point than other major oil producers. Consequently, even if oil prices slide notably, Total should be able to maintain its dividend without drastic cutbacks in exploration or development expenditures.

Total looks to still have the hallmarks of a solid income play. The company's valuation is reasonable, the return on assets and return on equity is good, the debt load is manageable, and the dividend payout ratio is sustainable. Although it's unlikely that the share price could withstand a prolonged pullback in oil prices, investors who can sit patiently and collect their dividends will most likely come out OK in the end.

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Fool contributor Stephen Simpson, CFA, has no ownership interest in any stocks mentioned.