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24 Of The Best European Dividend Stocks To Look For In 2020

24 of the best European dividend stocks to look for in 2020

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.

While dividends are susceptible to taxes in most countries, including Belgium -at a whopping 30%- dividend stocks are still a good 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 24 stocks from Belgium and Europe that paid dividend consistently over the last 10 years.

Please note that the market cap and dividend yield is at the time of writing so December 3rd, 2019.

The aristocrats

Old fashioned aristocratsSome on this list might not have the highest dividend payout but they are all consistent growers or aristocrats. 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 good guide. And yes, this differs from the US. I stuck with the definition as used in Europe.

There are already ETFs that cover European dividend stocks and that are aristocrats but I wanted to highlight some that have a very good 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 24 European stocks can be worth your money in 2020!

Health care sector

The health care sector is a fast grown sector 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.

Market value: $111.50 billion
Dividend yield: 4.03%
P/E ratio: 45.25
Consecutive annual dividend payouts: 10+

GlaxoSmithKline plc or gsk is a British pharmaceutical company with HQ in Brentford, London. According to The Motley Fool GSK has got some things going for them such as the company’s new shingles vaccine, Shingrix, Glaxo and Pfizer‘s consumer healthcare joint venture, and multiple other drugs that are in the pipeline.

Downsides are there as well unfortunately. A competitor Mylan, launched a discounted generic version of Advair that cut into GSK’s revenue for that drug. A promising treatment for overy cancer isn’t turning out to be such a wonderdrug either.

While there are definitly things to worry about, GSK’s trackrecord as a dividend payer can remain strong if they tackle the issues promptly.

Market value: €103.67 billion
Dividend yield: 3.63%
PE ratio: 28.36
Consecutive annual dividend payouts: 14

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.

Market value: €37.035 billion
Dividend yield: 2.02%
PE ratio: 29.58
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 Millenium.

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

Market value: €63.003 billion
Dividend yield: 4.08%
PE ratio: 10.31
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 manufacterer 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.

Consumer staples

Consumer staples 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.

Market value: €47.199 billion
Dividend yield: 2.65%
PE ratio: 21.79
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 focussing 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 recently tumbled from it’s top around 81 to 72 EUR. 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.

Market value: CHF 293.422 billion
Dividend yield: 2.39%
PE ratio: 32.61
Consecutive annual dividend payouts: 10+

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.

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.

Finances

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.

Market value: CHF 55.766 billion
P/E ratio: 14.44
Dividend yield: 4.90%
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.

Market value: EUR 90.322 billion
P/E ratio: 12.33
Dividend yield: 4.14%
Consecutive annual dividend payouts: 10+

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

Market value: EUR 57.617 billion
P/E ratio: 41.47
Dividend yield: 5.49%
Consecutive annual dividend payouts: 10+

AXA is a French multinational insurance firm headquartered in the 8th arrondissement of Paris that engages in global insurance, investment management, and other financial services.

Industry

According to Schwab, the Industrials 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.

Market value: $62.69 billion
P/E ratio: 6.87
Dividend yield: 4.69%
Consecutive annual dividend payouts: 14

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

Market value: $17.88 billion
P/E ratio: 29.78
Dividend yield: 1.50 – 1.60%
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.

Wolters Kluwer Dividend per share from 1996 to 2019

Market value: $99.31 billion
P/E ratio: 18.54
Dividend yield: 3.38%
Consecutive annual dividend payouts: 25

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

Market value: $11.04 billion
P/E ratio: 44.57
Dividend yield: 3.61%
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.

Market value: $35.97 billion
P/E ratio: 8.28
Dividend yield: 4.12%
Consecutive annual dividend payouts: 16

Rio Tinto is an Anglo-Australian multinational and one of the world’s largest metals and mining corporations. The company was founded in 1873.

Energy

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.

Market value: $135.044 billion
P/E ratio: 14.65
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.

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.

Market value: € 13.341 billion
P/E ratio: 19.84
Dividend yield: 5.18%
Consecutive annual dividend payouts:

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.

Market value: € 35.02 billion
P/E ratio: 16.18
Dividend yield: 5.01%
Consecutive annual dividend payouts:

ENGIE is a French multinational electric utility company, headquartered in La Défense, Courbevoie, which operates in the fields of energy transition, electricity generation and distribution, natural gas, nuclear, renewable energy and Petroleum.

Holdings

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.

Market value: €1.41 billion
P/E ratio: 13.98
Dividend yield: 4.50%
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.

Market value: $6.74 billion
P/E ratio: 7.10
Dividend yield: 0.99%
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.

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 marketleaders and in which it can play an active role as a professional shareholder over the long term.

Groep Brussel Lambert Dividend history

Real estate

If you don’t have the cash or the desire to put a large portion of your money and time into managing your own properties, real estate investment companies or REITs are a good alternative.

Market value: €1.594 billion
P/E ratio: 17.60
Dividend yield: 5.72%
Consecutive annual dividend payouts: 10+

Deutsche EuroShop AG is a German international REIT headquartered in Hamburg. It is the largest German investor in shopping centers, and the country’s only publicly traded company to do so exclusively.
Just like Klepierre, the second one in this real estate list, the fact that it focusses on shopping centers isn’t in it’s favor.

Market value: €9.359 billion
P/E ratio: 24.74
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. The question is, will it be able to sustain it’s dividend if it takes a hit?

Market value: €381.13 million
P/E ratio: 4.98
Dividend yield: 3.51%
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

Summary

There you have it, my list of 24 dividend stocks that could be worth a look in 2020.
With 2019 about to end and most companies finished spreading their wealth you can research which of these stocks could be just right for your portfolio.

If you see some incorrect or duplicate info please let me know and I will adjust it right away.

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
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Mr. FightToFIRE

Writer at Fight To FIRE
I'm the owner and the main writer of FightToFIRE, a personal finance blog focussing on Financial Independence and Retiring Early. During the regular working hours, I'm a developer for a major financial institution in Belgium. During my off-hours, I write. do some weight lifting and other stuff to keep me healthy and fit.
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