We recently published a list of 10 Best Annual Dividend Stocks To Buy Now. In this article, we are going to take a look at where Nestlé S.A. (OTC:NSRGY) stands against other best annual dividend stocks to buy now.
In 2025, dividends in MSCI Europe are expected to reach a record high. According to Allianz Global Investors, these firms are likely to increase dividend payouts by 4% year-over-year to €459 billion, up from €440 billion in 2024. In 2026, MSCI Europe dividends could catapult even higher to €496 billion. In Germany alone, payouts are projected to rise from €57 billion in 2024 to €63 billion in 2025, and possibly hit €70 billion in 2026. Allianz Global expects the Tech and Healthcare sectors to offer the highest dividend increases in 2025, while the Energy sector could likely create some weakness. The Financials sector will remain the biggest dividend contributor in Europe. Dividend yields are staying ahead of long-term German government bond yields as well, with the MSCI Europe dividend yield expected to be 3.5% this year.
Over the last 40 years, about 39% of MSCI Europe’s total annualized return resulted from dividends. Comparatively, dividend payouts made up 22% of total returns in MSCI North America and just over 41% in MSCI Pacific.
Jenny Harrington, CNBC Halftime Report’s go-to expert on dividends, observed that the broader market’s dividends have grown about 5.7% in the last 50-60 years, which means that dividend income is outpacing inflation. She also noted that dividends are a tax-advantaged income stream, which is a huge plus. Harrington also commented that dividend investors are more likely to hold their portfolios rather than selling in a panic when markets go down. They are reluctant to give up their income streams and risk wasting years of effort, which helps keep dividend portfolios steady and resilient, even during market selloffs.
Harrington also told investors that some companies may not have strong growth potential but generate high free cash flow, allowing them to pay dividends. However, those seeking high-growth stocks should carefully balance their portfolios. Harrington advised investors to explore opportunities beyond the broader market, as the index is heavily dominated by its top 10 stocks. She suggested that looking at other companies, including dividend stocks, could offer better value and growth potential. Given this, we will now take a look at some of the best annual dividend stocks.
Our Methodology
For this article, we manually researched annual reports and company websites to see which stocks pay dividends annually. 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 February 6.
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Nestlé S.A. (OTC:NSRGY)
Dividend Yield as of February 6: 3.83%
Number of Hedge Fund Holders: N/A
Ranking 4th on our list of the best dividend stocks with annual payouts is Nestlé S.A. (OTC:NSRGY). Nestlé S.A. (OTC:NSRGY) is a household name across the world, and it is very common to come across Nestlé products at home or work – be it baby food, bottled water, cereals, chocolate, coffee, frozen food, dairy products, or pet food.
On December 23, 2024, Nestlé S.A. (OTC:NSRGY) concluded its share buyback program, which began in January 2022. Over these years, the company repurchased 187.4 million shares for CHF 20 billion at an average price of CHF 106.74 per share. Several batches of these shares were canceled at annual meetings in 2022, 2023, and 2024, reducing Nestlé’s total share capital to CHF 262 million. The remaining 43.5 million shares will be considered for cancellation at the 2025 annual general meeting.
Nestlé reported CHF 67.1 billion in sales for the first nine months of 2024, a 2.4% decline from the previous year, mainly due to currency fluctuations. However, organic growth was 2.0%, driven by a 0.5% real internal growth (RIG) and 1.6% pricing adjustments after earlier price hikes. Coffee was Nestlé S.A. (OTC:NSRGY)’s top-performing category, with mid-single-digit growth from Nescafé, Starbucks, and Nespresso. Nestlé also updated its 2024 guidance and now expects 2% organic growth, a 17% profit margin, and flat earnings per share in constant currency. Nestlé S.A. (OTC:NSRGY) pays dividends once a year, making its last payout on April 24, 2024.
Overall, NSRGY ranks 4th on our list of best annual dividend stocks to buy now. Overall, NSRGY ranks first on our list of the best annual dividend stocks. While we acknowledge the potential of NSRGY to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MBG.DE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.