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Best European Dividend Stocks

19 Best European Dividend Aristocrat stocks to look for in 2021

Last Updated on December 13, 2020 by Mr. FightToFIRE

Heads up before you read these suggestions. These and other posts like them are my own thoughts and ideas. I’m not a broker/dealer, nor am I an investment advisor. I have no access to non-public information about publicly traded companies, and this is not a place for the giving or receiving of financial advice, advice concerning investment decisions or tax or legal advice.

One year ago, I wrote this article to share some of the best dividend-paying stocks in Europe. But a major event caused a disruption requiring me to review it with a magnifying glass. I’m of course talking about the corona pandemic. Some original stocks were removed either because they lowered their dividend or cut it altogether. It’s not too bad though. Of the 24 original European dividend aristocrats, only 19 remained.

While dividends are susceptible to taxes in most countries, including Belgium -at a whopping 30%- dividend stocks are still a superb choice exactly because they can pay a dividend. When you have a core-satellite strategy like I have where you want to allocate a bit of money to generate some alpha, this list can be a good starting point.

I’ve selected 19 European dividend stocks that paid dividends consistently over the last 10 years and thus are among the best European dividend stocks or European dividend aristocrats to hold.

The best dividend stocks from Europe

Old fashioned aristocrats

Some on this list might not have the highest dividend payout but they are all consistent growers. This means their dividends have risen or at least remained steady in the last 10 consecutive years. While it’s never a guarantee for the future, it’s at least a helpful guide if you ask yourself the question: what are the best European dividend aristocrats? And yes, this dividend aristocrats definition differs in Europe from the US. I stuck with the definition as used in Europe.

There are already European dividend aristocrats ETFs that cover European dividend stocks that also contain aristocrats, but I wanted to highlight some that have a terrific track record. Chances are that I dropped the ball on some, so I will try to update this post frequently.

Let’s dive right into it and see which 19 European dividend stocks can be worth your money in 2021!

Best dividend stocks Consumer industry

Consumer industry are companies on the top of your weekly shopping trip.  It is those essential products that include food, beverage, household goods, and hygiene products.

A recent article published by Schwab describes consumer staples as a sector that has historically outperformed during periods of economic slowdown and uncertainty, the perceived relative stability of the group attracts investors from everywhere. But the competition has accelerated because of the growth of low-cost emerging-markets’ production. This could hurt pricing power in the sector by compressing margins and squeezing earnings.

Danone (France)

Market value: €47.199 billion
Dividend yield: 3.81% (2019)
PE ratio: 19.18
Consecutive annual dividend payouts: 30+

Danone S.A. is a French food-products business based in Paris and founded in Barcelona, Spain. The company is listed on Euronext Paris where it is a component of the CAC 40 stock market index. Some of the company’s products are branded Dannon in the United States.

What began as a yoghurt production company grew into a multi-national focusing on beverages, cereals and dairy. In recent years the group’s total sales come from fresh dairy products (50%), early life nutrition (22%), water (21%), and medical nutrition (7%).

It has continued to tumbled from a top of around 81 to 52 EUR in 2020. It’s not performing exceptionally well and it’s using debt to stimulate growth. With net debt of 2.80 times its EBITDA, Danone has a noticeable amount of debt, although if business stays steady, this may not be overly concerning. The main attraction is it’s steady dividend payout.

Nestlé (Switzerland)

Market value: CHF 293.422 billion
Dividend yield: 2.46% (2019)
PE ratio: 23.15
Consecutive annual dividend payouts: 30+

As mentioned in my intro to consumer staples, a company like Nestle is a solid investment in times of broader decline; everyone needs food to survive and the Swiss company is the biggest in the business. Besides food, Nestle also has the largest coffee brand under de brand Nescafe which distributes Starbucks retail products around the world.

If anything 2020 has shown us it’s that this holds true even during a global pandemic. It’s consistent dividend payout history isn’t in danger and the most recent dividend payout of 2.70 at the end of last year shows this. Of course, there’s never a guarantee it’ll be smooth sailing for Nestle but it should do just fine, no matter what’s in store for the global economy.

Best dividend stocks Health Care sector

The health care sector is one of the fastest grown sectors not only in Europea but across the world that encompasses everything related to your health.

Companies that provide medical services, manufacture medical equipment or drugs, provide medical insurance, or otherwise facilitate the provision of healthcare to patients.

UN studies state that estimates that by 2050, one out of every six people will be 65 or older, accounting for 16% of the planet’s total population, up from 9% in 2011. This can cause a surge in health care costs and thus revenue for the sector.

And now with a pandemic in full swing (of which the US is taking the full brunt), a solid health care system is more important than ever. By investing in these European Healthcare aristocrats you will cover yourself for years to come.

Sanofi (France)

Market value: €103.67 billion
Dividend yield: 3.85%
PE ratio: 14.77
Consecutive annual dividend payouts: 26

This is a pharmaceutical company with it’s HQ in Paris, France. It’s the fifth-largest by revenue. It’s manages the entire chain of prescriptions: from R&D to manufacturing. It’s largest market are the US, with Europe second and China third.

According to Barrons the company is well-positioned to succeed over the next few years.

The Board of Directors convened on February 5, 2020, and proposed a dividend of €3.15 per share. It was approved by the Shareholder’s General Meeting on April 28, 2020 and marks the 26th consecutive annual increase.

Royal Philips NV (The Netherlands)

Market value: €37.035 billion
Dividend yield: 2.7% (2019)
PE ratio: 23.3
Consecutive annual dividend payouts: 14

Philips is a Dutch multinational corporation headquartered in Amsterdam. It’s one of the largest electronics companies in the world, currently focused in the area of healthcare and lighting. The lighting division was spun off as a separate company, Signify N.V. (formerly Philips Lighting before 2018).

Philips was founded in 1891 as a producer of carbon-filament lamps. It later ventured into vacuum tubes and electric razors. It even is in the current Phillips lineup of razors. It continued to evolve and grow with the production of TV’s, video players, vinyl records, etc. to health care in the new Millennium.

Throughout its history Phillips has shown why it’s still a stronghold today even though smart money (professional investors) lost interest.

Their dividend is still going strong though the yield has dropped to 2.7% as of 2019 compared to 5.1% in 2009.

Bayer AG (Germany)

Market value: €63.003 billion
Dividend yield: 3.8%
PE ratio: 8.17
Consecutive annual dividend payouts: 14

Bayer is a German multinational pharmaceutical and life sciences company and one of the largest pharmaceutical companies in the world together with GSK and Sanofi. They started out as a manufacturer of aspirin but now include business in human and veterinary pharmaceuticals; consumer healthcare products; agricultural chemicals, seeds and biotechnology products. Having such a diversified portfolio means they remain strong up until this day.

Best dividend stocks Finance sector

It’s been a rough decade for the financial sector, especially in Europe where the financial sector still holds a lot of weight and where the crisis in 2008 caused a severe impact. The Euro crisis in 2010 made matters even worse.  Many associate the entire sector with greed and fraud, but that would write off an entire sector which is one of the most important factors behind a healthy economy.

While the sector is still trying to shed the blanket of shame, it has recovered bit by bit. Thanks to stricter guidelines and rules by the ECB, banks should be more robust and able to withstand bigger shocks if they were to happen.

Zurich Insurance Group (Switzerland)

Market value: CHF 55.766 billion
Dividend yield: 5.49% (2019)
P/E ratio: 10.90
Consecutive annual dividend payouts: 10+

Zurich Insurance Group Ltd. is a Swiss insurance company, headquartered in Zürich, Switzerland. The company is Switzerland’s largest insurer.

It’s current dividend yield is relatively high at 5.49%. It’s higher than similar companies but it seems to be maintainable for the moment.

Allianze (Germany)

Market value: EUR 90.322 billion
P/E ratio: 9.08
Dividend yield: 4.4%
Consecutive annual dividend payouts: 12

Allianz SE is a German multinational financial services company headquartered in Munich, Germany. Its core businesses are insurance and asset management.

A comforting sign that this is a dividend stock worth having, is the commitment from management to keep paying dividend amidst the pandemic. They are aware of the thousands of retail shareholders and multiple pensions funds rely on them for a consistent dividend strategy and thus commit to paying out one for book year 2019.

Management is also cognizant of the fact that many of our 650,000 retail shareholders as well as many pension funds and other institutional investors rely on our dividend as an important part of their income. Therefore, after having considered and weighed up all arguments, the Board of Management has decided to confirm its intention to propose a dividend of EUR 9.60 per share for the financial year 2019 to this year’s Annual General Meeting (AGM).

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Best dividend stocks Industry and Manufacturing

According to Schwab, the Industrials and Manufacturing sector has been sensitive to fluctuations in the U.S.-China trade relationship this year. Weakness may threaten the profitability of this globally oriented sector.
The Industrials sector has suffered from concerns about slowing global economic growth, with industrial output faltering as a manufacturing downturn has broadened globally.

BASF (Germany)

Market value: $62.69 billion
P/E ratio: 23.10
Dividend yield: 4.90%
Consecutive annual dividend payouts: 15

BASF is a chemical company with a stellar track record, though these last 2 years were a less noteworthy.

Wolter Kluwer NV (The Netherlands)

Market value: $17.88 billion
P/E ratio: 25.04
Dividend yield: 1.81%
Consecutive annual dividend payouts: 30+

is a global information services company. The company is headquartered in Alphen aan den Rijn, Netherlands. For more than 30 years, Wolters Kluwer has increased or maintained its annual dividend per share in euros (or euro equivalent). In 2007, the company established a progressive dividend policy and, since 2011, all dividends are paid in cash. In 2015, they introduced an interim dividend payment which they have increased for fiscal year 2019.

Wolters Kluwer Dividend per share from 1996 to 2020

Siemens AG (Germany)

Market value: $99.31 billion
P/E ratio: 23.84
Dividend yield: 3.4%
Consecutive annual dividend payouts: 25

Siemens is a German industrial manufacturing company headquartered in Munich with branch offices abroad.

Solvay SA (Belgium)

Market value: $11.04 billion
P/E ratio: 44.57
Dividend yield: 3.81%
Consecutive annual dividend payouts: 30+

Solvay is a Belgian chemical company founded in 1863, yes 19th century, with its head office in Neder-Over-Heembeek, Brussels, Belgium. It focusses on Chemicals and plastics.
The company gives an interim dividend (typically 40% of the previous year’s total dividend), plus a balance payment for the final dividend. The interim dividend is announced with the Q3 results and paid in January.
The final dividend is announced in February, along with our Full Year Results, and is paid after the yearly Shareholders Meeting, in May. It’s also a stock that I already mentioned in my 9 stocks to buy in 2019.

During this corona-year Solvay decided to keep the total dividend stable by reducing the final dividend to 2.25 EUR instead of increasing it.

Best dividend stocks Energy sector

Energy, something we can’t live without in 2019 so energy suppliers like EDP and ENGIE remain a good option to look into. We are also still heavily dependent on oil. Therefore, the companies below are interesting to look at.
Oil-focused stocks naturally are subject to the price of oil, which depends, in part, on Middle East politics, the global economy and U.S. driving habits. Oil prices (and natural gas and other energy sources) also depend on supply, and oil has been plentiful. It makes them a hard buy but thanks to their recent dip (TOT comes from an all-time high of $64 – $65) they are relatively cheap.

Total SA (France)

Market value: $118.65 billion
P/E ratio: 12.88
Dividend yield: 5.48%
Consecutive annual dividend payouts: 10+

Total S.A. is a French multinational integrated oil and gas company founded in 1924 and one of the seven “Supermajor” oil companies in the world.
One of the big concerns for oil companies os how they manage the shift from oil to renewable energy. Luckily Total is investing in a variety of initiatives to reduce its carbon footprint. According to The Motley Fool The company, for example, is planning to double its liquified natural gas (LNG) production by 2025. That fuel produces roughly 40% fewer greenhouse gas emissions than coal, when used to generate electricity.

Enagas SA (Spain)

Market value: € 5.41 billion
P/E ratio: 11.98
Dividend yield: 6.58%
Consecutive annual dividend payouts:

Enagas SA is a Spain-based company primarily engaged in the gas transportation. The Company’s activities are divided into three business segments: Infrastructure, Technical management and Unregulated activities. It owns and operates the nation’s gas grid. The firm also owns four liquefied natural gas regasification terminals in the country, at Huelva, Barcelona, Cartagena and Gijon.

EDP (Portugal)

Market value: € 13.341 billion
P/E ratio: 39.80
Dividend yield: 3.97%
Consecutive annual dividend payouts: 10+

Energias de Portugal is a Portuguese electric utilities company, headquartered in Lisbon. It was founded in 1976 through the merger of 14 nationalised electricity companies. The dividend payout remains the same as previous years at 0.19 EUR with a payout in April.

Best dividend stocks Holdings sector

With holding companies you are buying into a diversified portfolio of stocks. Almost like a mini-ETF. There are exceptions like Solvac in this list that only have one company but the majority is wide-ranging and can even have its hands in private companies not available to the retail investor.

They hold a controlling ownership interest in other companies or the assets that those companies use. A holding company holds equity interests or assets, rather than participating in business.

The most famous holding company is Berkshire Hathaway Inc., the Omaha, Nebraska company that Warren Buffett controls and manages.

While I don’t mention Berkshire Hathaway because it’s American, look into the following stocks if you are looking for local diversification.

Gimv SA (Belgium)

Market value: €1.28 billion
P/E ratio: 11.9
Dividend yield: 5.09%
Consecutive annual dividend payouts: 21

Gimv is a Belgian European investment company with experience in private equity and venture capital. Gimv  around 1.6 billion EUR invested in about 50 portfolio companies. Gimv is a major player in the Belgian and north west European eco system.

Gimv is debt free and even has over 200 million in its bank account.
Just like Sofina, Gimv invests almost completely in private equity and offers an excellent opportunity to invest in unlisted companies, a segment that is difficult for small investors to access. Moreover, their track records are excellent.

The pandemic luckily didn’t impact their dividend policy and hey paid a gross dividend of 2.50 EUR for fiscal year 2019 and payout on 28/07/2020.

Sofina SA (Belgium)

Market value: $6.74 billion
P/E ratio: 21.84
Dividend yield: 1.09%
Consecutive annual dividend payouts: 42

Sofina, Société Financière de Transports et d’Entreprises Industrielles, is a Belgian holding company, headquartered in Brussels, which invests in several industrial sectors such as telecom, banks and insurers, private equity, etc.

It’s also one of the stocks I have in my own portfolio.

Groep Brussel Lambert NV (Belgium)

Market value: €14.92 billion
P/E ratio: 18.96
Dividend yield: 2.33%
Consecutive annual dividend payouts: 15

Groupe Bruxelles Lambert, is a Belgian holding company invested in various sectors within companies that can be considered market leaders and in which it can play an active role as a professional shareholder over the long term.

GBL is another company that understands its shareholders very well as it will increase its dividend to 3.15 EUR gross for fiscal year 2019 with payout in May 7 2020. Thanks to this GBL is able to have a growing dividend for 15 years now [PDF].

Best dividend stocks Real Estate industry

If you don’t have the cash or the desire to put much of your money and time into managing your own properties, real estate investment companies or REITs are a good alternative. Why? Read my article about REITs and my favorite Belgian REITs for 2020.

Many investors look at these trusts for their excellent dividend policy. US legislators require REITs to pay out at least 90% of their profit. In  Belgium the minimum is 80%. It’s not uncommon for REITs to have a payout ratio of 4% or more. The average according to NAREIT is just shy of 4%.

Klepierre SA (France)

Market value: €9.359 billion
P/E ratio: N/A
Dividend yield: 6.47%
Consecutive annual dividend payouts: 10+

Klépierre is a French real estate investment trust and Europe’s second-biggest publicly traded mall operator. The company is present in 57 metropolises and 16 countries and owns more than 100 leading shopping centres. Unfortunately, just like in the US, it seems like the height of shopping malls is behind us. LI’s revenue level is expected to decline by -2.65% by 2021.

It really is a stock just for it’s dividend. Last year I wondered if it would be able to maintain it’s dividend and the answer to that question is resounding yes. For 2020 (book year 2019) they will payout a total gross dividend of 2.20 EUR (from 2.10 the year before).

Home Invest Belgium NV (Belgium)

Market value: €381.13 million
P/E ratio: 14.1
Dividend yield: 3.99% (2019)
Consecutive annual dividend payouts: 35

Home invest Belgium is a property investment company that specializes in Brussels and the other important Belgian cities. It’s main strength is the stable structure that REITs represent. The graph below shows this steady stream through the dividends paid.

Groep Brussel Lambert Dividend history
GBL has more than doubled its gross dividend per share, which corresponds to a 4.9% CAGR over this period; and returned EUR 5.6 billion to its shareholders.

Summary of Europe's best dividend aristocrats to look at in 2021

There you have it, my list of the 19 best European dividend aristocrats that could be worth a look in 2021 and beyond.

Clearly, the corona pandemic had an impact on a number of dividend aristocrats this year. The companies that I had to cut were:

  • GSK
  • AXA bank and insurances
  • Rio Tinto*
  • Engie SA
  • Deutsche Euroshop AG

If you notice I mention a company that cut their dividend after all, don’t hesitate to inform me and I will adjust it right away.

*Rio Tinto actually wasn’t an aristocrat, its total dividend payout was lower in 2016.

Do you have any favorite (dividend) stocks or do you stick to the simple and straightforward buy and hold ETF strategy?

Please leave a comment below and share your thoughts!

Sources:

  • Wikipedia
  • The Motley Fool
  • Yahoo Finance
  • Simply Wall street

I'm a developer for a major financial institution in Belgium that is present in over 40 countries. I have over 8 years of working experience in the development of customer applications focussing on all aspects of banking. This helped me gain a deep understanding of the inner workings of a commercial bank. All of this experience in both banking and life culminates in this blog about personal finance and my fight towards FIRE.

This Post Has 7 Comments

  1. Hi Mr. FightToFIRE

    Very nice post. I saved it for a better look in the near future.

    I’m also a big fan of Dividend Stocks. From the ones mentioned in your post, I own HOMI. I’m dating Nestle for a while, but the P/E looks prohibitive.

    All the best.

    Cheers!

  2. Interesting post! It’s a shame these kind of lists are so hard to find for European stocks. I don’t know a lot of these companies, but will definitely research them! Personally I’d add Unilever to the list, although having both Nestlé and Unilever might be overkill.

  3. Thanks for your list, which I will definitely research further. I recently bought into DS Smith. They are listed on the UK stock exchange but have UK and European operations. They are cardboard suppliers to Amazon etc. Dividend yield approx 4.3% and PE around 11. Also MNG dividend yield around 6% but I don’t know how the coronavirus will affect this. Does anyone know what the tax treatment of the dividends listed in this article is?

    1. Hey Harry, thanks for your response. Glad you liked it! I do my best to keep it up to date and readable, so expect a revision of this post soon.

      When it comes to taxes on dividends, it depends on your home country and the treaty it has with other countries, a so-called ‘double tax treaty’. For Belgium, there is a 30% withholding tax on dividends regardless of the agreement with the country of origin.
      If there is a treaty and the country of origin has a withholding tax, this tax can be lowered to 15% (12.8% for France).

      For example, if the dividend comes from the UK -and before the Brexit- there was no withholding tax on dividends, so you were only due the 30% from Belgium.

      Hope this helps.

      Mr.FightToFIRE

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