In this article, we discuss 5 best European dividend stocks to buy now. If you want to read our detailed analysis of European dividend stocks and their returns, go directly to read 10 Best European Dividend Stocks to Buy Now.
5. TotalEnergies SE (NYSE:TTE)
Dividend Yield as of October 22: 3.81%
TotalEnergies SE (NYSE:TTE) is a French multinational energy and petroleum company and is one of the major oil companies in the country. In September, the company announced the adoption of its cash flow allocation strategy for the coming years. The strategy states that 35% to 40% of the company’s cash flow will be distributed among shareholders while maintaining its transformation plans with annual net investments amounting to $14 billion to $18 billion between 2022 to 2025.
TotalEnergies SE (NYSE:TTE) currently pays an interim dividend of €0.69 per share with a dividend yield of 3.81%, as of October 22. On September 28, the company also announced a special interim dividend of €1.00 per share, which makes the company one of the best dividend stocks on our list. In Q2 2022, it generated over $13.2 billion in cash flow and $4.5 billion in free cash flow, which shows that the company has sufficient cash to support its dividends.
In October, JPMorgan raised its price target on TotalEnergies SE (NYSE:TTE) to €66 with an Overweight rating on the shares, appreciating the company’s free cash flow outlook.
Of the 895 elite funds tracked by Insider Monkey, 20 hedge funds reported a bullish stance on TotalEnergies SE (NYSE:TTE) in Q2 2022, the same as in the previous quarter. The stakes owned by these hedge funds have a total value of over $1.88 billion. Arrowstreet Capital is one of the company’s main stakeholders in Q2.
Artisan Partners mentioned TotalEnergies SE (NYSE:TTE) in its Q2 2022 investor letter. Here is what the firm has to say:
“We added one new position this quarter, TotalEnergies SE (NYSE:TTE). TTE is one of the world’s largest energy companies. It develops and produces oil and gas, produces and sells refined products, is one of the largest producers and traders of LNG, and owns a large portfolio of renewable power generating assets. TTE has one of the lowest cost portfolios of oil and gas assets and therefore one of the lowest breakeven points in the industry. It also has one of the best balance sheets in the industry. We estimate it will reach a net cash position sometime in 2023. (Click here to view the full text).
4. Novartis AG (NYSE:NVS)
Dividend Yield as of October 22: 4.31%
Novartis AG (NYSE:NVS) is a multinational pharmaceutical corporation with headquarters in Switzerland. It is one of the largest pharmaceutical companies in the world. The company is one of the best dividend stocks on our list as it has been raising its payouts consistently for the past 25 years. It currently pays an annual dividend of CHF 3.10 per share and has a dividend yield of 4.31%, as of October 22.
In the second quarter of 2022, Novartis AG (NYSE:NVS) reported a free cash flow of $3.3 billion and its net income came in at $1.7 billion. The company’s Q2 sales grew by 5% and generated $12.7 billion in total revenues. In 2021, it paid nearly $7.5 billion in annual dividends to shareholders, reflecting its shareholder obligation.
In September, Kepler Cheuvreux upgraded Novartis AG (NYSE:NVS) to Buy with a CHF 90 price target. The firm mentioned the company’s growing sales but also expressed concerns regarding its research and development abilities.
As of the close of Q2 2022, 22 hedge funds tracked by Insider Monkey owned stakes in Novartis AG (NYSE:NVS), up from 21 in the previous quarter. These stakes have a total value of over $1.76 billion. Fisher Asset Management is the company’s largest stakeholder in Q2, owning stakes worth over $950.6 million.
3. Sanofi (NASDAQ:SNY)
Dividend Yield as of October 22: 4.32%
Sanofi (NASDAQ:SNY) is a French multinational pharmaceutical and healthcare company that provides life-changing treatments to its consumers. In October, Barclays maintained an Equal Weight rating on the stock with an €85 price target, highlighting the company’s balance sheet and earnings growth.
In Q2 2022, Sanofi (NASDAQ:SNY) reported a free cash flow of over €1.5 billion, up 7.5% from the same period last year. The company’s revenue for the quarter came in at €10.1 billion, versus a consensus of €9.8 billion. Its vaccines were also up by 8.7% due to a strong rebound in travel and booster shots.
Sanofi (NASDAQ:SNY) has been raising its dividends consistently for the past 28 years, coming through as one of the best dividend stocks on our list. The company currently pays €0.83 per share in quarterly dividends and has a yield of 4.32%, as of October 22.
The number of hedge funds tracked by Insider Monkey owning stakes in Sanofi (NASDAQ:SNY) grew to 28 in Q2 2022, from 19 in the previous quarter. These stakes have a consolidated value of over $1.68 billion. With 4 million shares, Camber Capital Management was one of the company’s leading stakeholders in Q2.
2. Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)
Dividend Yield as of October 22: 5.19%
Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) is a Germany-based healthcare company that mainly provides kidney dialysis services to its patients and has over 4,000 outpatient dialysis centers. In 2022, the company announced a 0.7% hike in its annual dividend to €1.35 per share. This was the company’s 25th consecutive year of dividend growth, which makes it one of the best dividend stocks on our list. As of October 22, the stock has a dividend yield of 5.19%.
In October, Morgan Stanley initiated its coverage of Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) with an Equal Weight rating and a €34 price target, presenting a positive stance on the Medtech group. The firm also mentioned that these stocks are among the defensive industry groups.
As of the close of Q2 2022, 8 hedge funds tracked by Insider Monkey owned stakes in Fresenius Medical Care AG & Co. KGaA (NYSE:FMS), down from 10 a quarter earlier. The consolidated value of these stakes is over $361 million. Pzena Investment Management owned over 13 million shares in the healthcare company in Q2, becoming the company’s major stakeholder.
1. British American Tobacco p.l.c. (NYSE:BTI)
Dividend Yield as of October 22: 7.51%
British American Tobacco p.l.c. (NYSE:BTI) is a manufacturer of tobacco and related products with headquarters in London. On September 28, the company announced a quarterly dividend of $0.7404 per share, in line with its previous dividend. It maintains a 23-year streak of consistent dividend growth, which qualifies it as one of the best dividend stocks on our list. As of October 22, the stock’s dividend yield came in at 7.51%.
In August, Barclays lifted its price target on the stock to 4,500 GBP and maintained an Overweight rating on the shares.
In the first six months of 2022, British American Tobacco p.l.c. (NYSE:BTI) reported an operating cash flow of £3.2 billion, up 42.9% from the same period last year. Its free cash flow for the first six months grew to £2.3 billion, from £1.2 billion in the prior-year period. Year-to-date, the company returned £3.8 billion to shareholders, £2.5 billion of which accounted for dividend payments.
According to Insider Monkey’s data, 17 hedge funds owned investments in British American Tobacco p.l.c. (NYSE:BTI) in Q2 2022, down from 19 in the previous quarter. These investments are worth over $2.3 billion.
Distillate Capital Partners LLC mentioned British American Tobacco p.l.c. (NYSE:BTI) in its Q1 2022 investor letter. Here is what the firm has to say:
“Distillate Capital’s International FSV Strategy is less expensive, more fundamentally stable, and less levered than the benchmark All Country World Ex U.S. (ACWI-EX US) Index.The largest new position is British American Tobacco (NYSE:BTI), which was not owned previously due to leverage, but now passes that threshold and offers an 11% free cash flow to market cap yield.”
You can also take a look at 11 Best Income Stocks to Buy Right Now and 13 Best Long-Term Dividend Stocks to Buy Now
