In this article, we will take a look at the 10 Best European Dividend Stocks To Buy.
Dividend payouts for MSCI Europe companies hit a record €407 billion in 2023, and they are set to grow even more in 2024, with an expected increase to €433 billion, up about 6.5%. According to Allianz Global Investors, the total dividend payout is expected to reach €460 billion by 2025, marking a 13% rise from 2023. The dividend yield is also climbing. It stood at 3.47% at the end of 2023 and could go up to 3.67% in 2024. This is still well above the yield on long-term German government bonds, even after bond yields shot up in 2022. German companies in the MSCI index paid out a 3.3% dividend in 2023, with a projected rise to 3.53% in 2024. Meanwhile, companies from Norway, though still at the top, are expected to see a slight decline in their yield, from 7.2% in 2023 to 6.4% in 2024.
Dividends have had a huge impact on overall equity performance in Europe. Over the last 40 years, about 36% of MSCI Europe’s total return has come from dividends. From 2019 to 2023, dividends made up almost half of the overall return, and from 2014 to 2018, they were responsible for most of it. On top of that, dividend-paying companies tend to have less volatile stock prices compared to those that don’t pay dividends.
Also Read: 10 Dividend Stocks For Steady Income and 10 Best Bank Stocks With High Dividends.
Global dividends hit a record $1.66 trillion in 2023, and they’re expected to reach $1.72 trillion in 2024, according to Janus Henderson. Dividend growth in 2023 was up 5%, with a 7.2% rise in Q4 alone. Banks were a major driver of this growth, delivering record payouts and benefiting from higher interest rates that boosted their margins. Although miners slowed down the overall growth, other industries like vehicles, utilities, software, food, and engineering showed strong performance, highlighting the value of having a diversified portfolio. Twenty-two countries saw record dividend payouts, with Europe (excluding the UK) and Japan playing a key role. The UK saw a 5.4% rise in dividends, and France, Germany, and Italy also set new records.
S&P Global Market Intelligence forecasted that Europe’s dividend payouts would hit €474 billion in 2024, which is a slight dip of 0.8% compared to last year. However, excluding special payments, ordinary dividends should rise by 4%, reaching a new high of €463 billion. Banks are leading the charge, making up 15% of the total dividend payouts, followed by capital goods and energy, both at 9%. The materials sector is set to see a 16% decrease in dividends, but it will still contribute about 6%, the same as utilities and food, beverage, and tobacco. The banking, capital goods, and pharmaceutical sectors are likely to see double-digit increases in their dividends, with banking staying strong at the top. On the flip side, the transportation sector might experience a steep 49% drop. That said, factors like geopolitical tensions and stubborn inflation might pose some risks for dividends in 2025.
An investor holding a check representing the dividends paid out by the investment trust.
Our Methodology
For this article, we used the Finviz stock screener to filter out European dividend stocks. We focused on picking stocks with a consistent record of paying dividends, offering dividend growth, and being financially stable to steer clear of yield traps. The list below is ranked in the ascending order of dividend yield as of December 20. We have also mentioned the number of hedge fund holders in each firm, which was sourced from Insider Monkey’s Q3 2024 database.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
10. UBS Group AG (NYSE:UBS)
Dividend Yield as of December 20: 1.18%
Number of Hedge Fund Holders: 25
UBS Group AG (NYSE:UBS) is a global financial services company based in Zurich, Switzerland. The company works with individuals, businesses, and institutions, offering everything from wealth management and personal banking to investment advice and corporate banking. In June 2024, UBS wrapped up its $3.2 billion merger with Credit Suisse Switzerland. While Credit Suisse clients are now part of UBS, the full migration of most client transactions to the UBS platform is planned for 2025 and will be rolled out gradually.
Building on its strong foundation, UBS Group AG (NYSE:UBS) had a strong third quarter, reporting a $1.4 billion net profit. These results highlight the bank’s robust diversified business model, global scale, and continued progress with integration efforts. Revenue increased 9% year-over-year, with solid growth in the Americas and APAC, while invested assets grew 15% to $6.2 trillion. UBS also had a successful launch of its unified global alternatives unit, which established the bank as a top 5 player in the sector. In Switzerland, despite some challenges with net interest income, UBS continued supporting the economy by granting or renewing CHF 35 billion in loans during the quarter.
UBS Group AG (NYSE:UBS) has also taken steps to align its capital position with future growth and shareholder returns. By voluntarily phasing out remaining transitional capital adjustments earlier than planned, the bank has brought its CET1 capital ratio to 14.3%, in line with its guidance. This move maintains a strong balance sheet and does not affect ongoing share buybacks for 2024 or UBS Group AG (NYSE:UBS)’s medium-term plans for dividends and buybacks.
Reflecting its commitment to delivering value to shareholders, UBS announced a $0.70 per share dividend for 2023 on February 6, 2024 – an impressive 27% increase year-over-year. The dividend was distributed to shareholders on May 3. It is one of the best dividend stocks on our list.
9. Linde plc (NASDAQ:LIN)
Dividend Yield as of December 20: 1.31%
Number of Hedge Fund Holders: 63
Linde plc (NASDAQ:LIN) is a global industrial gas company offering gases like oxygen, nitrogen, helium, and hydrogen. It also designs and builds process plants for industries such as healthcare, chemicals, manufacturing, and electronics. Founded in 1879, Linde plc (NASDAQ:LIN) operates worldwide and is headquartered in Woking, United Kingdom. On November 1, 2024, BMO Capital Markets raised its price target for Linde plc (NASDAQ:LIN) from $477 to $507, maintaining an Outperform rating. The upgrade reflects Linde’s strong execution of its growth strategy, even amid broader economic challenges.
Linde plc (NASDAQ:LIN) reported a 2% rise in sales to $8.4 billion in the third quarter of 2024, driven by project activity and strong demand for liquefied natural gas infrastructure. The company also secured a major $2 billion contract with Dow Chemical, boosting its project backlog to a record $10 billion. Dow’s ambitious project aims for net-zero carbon emissions at its Alberta facility, transitioning from natural gas to low-carbon blue hydrogen. As an industrial partner, Linde plc (NASDAQ:LIN) will provide atmospheric gases, low-carbon hydrogen, and CO2 capture and off-gas cleanup services. For Q4 2024, Linde expects earnings per share between $3.86 and $3.96, with a full-year EPS forecast of $15.40 to $15.50, reflecting a 9-10% growth.
Linde plc (NASDAQ:LIN) announced a quarterly dividend of $1.39 per share on October 28. The dividend will be paid on December 17 to shareholders on record as of December 3. The company has a 31-year record of increasing dividends consistently.
Insider Monkey’s Q3 database shows that 63 hedge funds had long positions in Linde plc (NASDAQ:LIN). LIN is ranked 9th on our list of the best European stocks for an income portfolio.
8. AstraZeneca PLC (NASDAQ:AZN)
Dividend Yield as of December 20: 2.27%
Number of Hedge Fund Holders: 42
AstraZeneca PLC (NASDAQ:AZN) is a global pharmaceutical company focused on developing, producing, and selling prescription medicines. Its products treat a wide range of conditions, including cardiovascular, renal, metabolic, oncology, COVID-19, and rare diseases. Founded as Zeneca Group PLC in 1992, the company rebranded to AstraZeneca PLC in 1999 and is based in Cambridge, UK.
The company’s top products include Tagrisso for lung cancer, Farxiga for diabetes and heart failure, and Imfinzi for various cancers. These medications are major revenue drivers across both established and emerging markets, with Tagrisso alone bringing in $6 billion last year. AstraZeneca PLC (NASDAQ:AZN)’s Oncology portfolio sets the company on track to exceed analyst expectations by year-end, helping counter concerns about declining vaccine and immunotherapy revenues.
AstraZeneca PLC (NASDAQ:AZN) has upgraded its full-year guidance, now expecting total revenue and core EPS to grow by high-teen percent. The pharma giant reported strong global revenue distribution in the first nine months, with 43% from the US, 21% from Europe, 13% from China, and 14% from emerging markets outside China, which have outpaced China’s contribution. To drive further US growth as part of its 2030 ambition, AZN announced a $3.5 billion investment in US manufacturing and R&D.
AstraZeneca PLC (NASDAQ:AZN) recently acquired Gracell Biotechnologies, Fusion Pharmaceuticals, and Amolyt Pharma, focused on cell therapies for cancer, targeted radiopharmaceuticals for oncology, and endocrine and metabolic diseases. These acquisitions aim to strengthen the company’s oncology and biotechnology pipelines. Net debt rose by $3.8 billion, primarily due to acquisitions finalized earlier this year, and $4.6 billion was allocated for dividend payments.
At the end of Q3 2024, AstraZeneca PLC (NASDAQ:AZN) was held in 42 hedge fund portfolios, according to Insider Monkey’s database. Ken Fisher’s Fisher Asset Management held the biggest stake valued at $816.5 million.
