In this article you will find out exactly which stocks are defined as European dividend aristocrats, i.e. the absolute best dividend stocks in Europe.
For me, these are European stocks to keep in your portfolio forever, given their spectacular track record.
Come with me.
- The original “Dividend Aristocrats” stock index is in the US
- There is an official European version inspired to the S&P Europe 350 Dividend Aristocrats
- The two indices are not the same because they are based on different principles
- A “Real European Dividend Aristocrats” list of stocks based on the US index requirements is possible and you can read it below
The European Dividend Aristocrats List
Here are the 40 stocks that are part of the best group of selected stocks with European Dividend Aristocrats characteristics:
|Air Liquide SA
|Deutsche Post AG
|Smurfit Kappa Group PLC
|EDP-Energias de Portugal SA
|Fresenius SE & Co. KGaA
|Health Care 🩺
|Munich Reinsurance Company
|Health Care 🩺
|Elisa Oyj Class A
|Communication Services 📡
|Kone Oyj Class B
|Health Care 🩺
|Brenntag Societas Europaea
|Hannover Rueck SE
|Warehouses De Pauw SA
|Real Estate 🏘️
|Deutsche Boerse AG
|Consumer Staples 🛒
|Schneider Electric SE
|Henkel AG & Co.
|Consumer Staples 🛒
|GEA Group Aktiengesellschaft
|Consumer Discretionary 🛍️
I do my best to keep this list up to date. However, it may not be perfect as dividend stocks come and go.
If I want to invest in European dividend stocks that have an impressive history of dividend growth, this is the list for me.
These are European stocks with at least 10 years of dividend growth and a market capitalisation of at least €3 billion.
Who are today’s European Dividend Aristocrats?
Hold on: Let us start at the beginning, in the United States.
There is a very popular index in the United States called the S&P 500 Dividend Aristocrats.
US investors love it because it is a super selection of stocks that have not only paid dividends for 25 consecutive years, but have also increased their dividends year on year.
Of course, these stocks have often outperformed the broader market.
What characteristics does a stock need to have to be one of the real ‘Dividend Aristocrats USA’?
Here are the requirements:
- Be included in the S&P 500 Index
- Have been raising (not just paying) a dividends for at least 25 years
- Have a market capitalisation of more than $3 billion (subject to change).
There are currently 68 US Dividend Aristocrats stocks in the US.
Now that we’ve established who the American Dividend Aristocrats are, let’s talk about the European Dividend Aristocrats.
What are the European Dividend Aristocrats?
The Difference between European and US Dividend Aristocrats explained.
Sorry to disappoint, but there is no exact European equivalent to the US Dividend Aristocrats index.
To be a stock eligible for the Dividend Aristocrats Europe index, you just need to do the following:
- Have increased (not just paid) dividends for 10 years or more
- Be included in the S&P Europe 350 Index
- Have a market capitalisation of over USD 3 billion (subject to change)
- Have an average daily trading volume of more than US$5 million (it is liquid)
Of course, this means that the list of the best European dividend stocks is much weaker than the US list. This is mainly because 10 ANI is much less than 25 and we have no certainty that these stocks will be able to increase their dividends even in times of market downturns.
That is why I have decided to select the absolute best European dividend stocks for you.
This selection is very strict and only includes European stocks that fall within very serious parameters.
Here is what a stock has to have to be one of the best European dividend stocks:
- Be listed in Europe or the UK
- Have been paying a dividend for 20 years or more (not just paying it)
- Have a market capitalisation of more than $3 billion
Stable dividends are not enough, we want it to increase over time.
Here is my list of 15 best European dividend stocks ever
- Nestlé: a Swiss multinational company that produces and sells food and beverages. It increased its dividend per share from EUR 0.72 in 2003 to EUR 1.28 in 2022.
- Unilever: a British group that manufactures and sells everyday consumer products. It increased its dividend per share from EUR 0.63 in 2003 to EUR 1.18 in 2022.
- Roche: a Swiss company that produces pharmaceuticals and biotechnology products. It increased its dividend per share from EUR 0.76 in 2003 to EUR 2.64 in 2022.
- Sanofi: a French company that produces drugs. It increased its dividend per share from EUR 0.38 in 2003 to EUR 1.67 in 2022.
- Diageo: a UK company that produces and sells alcoholic and non-alcoholic beverages. It increased its dividend per share from EUR 0.77 in 2003 to EUR 2.40 in 2022.
- L’Oréal: a French company that produces cosmetics and skin care products. It increased its dividend per share from EUR 0.88 in 2003 to EUR 2.64 in 2022.
- Novartis: a Swiss company that produces drugs and biotechnology products. It increased its dividend per share from EUR 0.76 in 2003 to EUR 4.08 in 2022.
- Enagas SA: a Spanish company that operates natural gas transmission and storage networks. It increased its dividend per share from EUR 0.312 in 2010 to EUR 1.032 in 2022.
- Ashtead Group: a British company that provides equipment rental services for construction, industrial and events sectors. It increased its dividend per share from GBP 0.16 in 2006 to GBP 0.85 in 2023.
- Coloplast: a Danish company that develops and sells medical devices and skin care products. It increased its dividend per share from DKK 2.07 in 2011 to DKK 21 in 2023.
- British American Tobacco: a British multinational company that manufactures and sells tobacco products. It increased its dividend per share from GBP 0.83 in 2008 to GBP 2.31 in 2022.
- Novo Nordisk: a Danish pharmaceuticals company that has increased its dividend every year since 1995.
- SAP: a German software company that has increased its dividend every year since 1988.
- RELX: a British information and analysis company that has increased its dividend every year since 1997.
- CRH: an Irish building materials company that has increased its dividend every year since 1989.
Data sources & opinions on the best European dividend yield stocks
I have used the following resources to compile this list:
My opinion on the best european dividend stocks is very good since I am myself an investor. To be honest, I also like to invest in the SCHD ETF alternatives like the best dividend ETFs for European investors. SInce some of those ETFs are not easily accessible from the best European stock Brokers I also use Freedom24 to buy it anyways.
What I think about Europe’s best dividend stocks
This list of stocks is undoubtedly attractive to any investor with a long-term view and capital to invest.
A European investor might prefer to invest in European dividend aristocrats rather than US stocks, mainly for tax reasons.
Indeed, when investing in US dividend stocks, European investors pay a withholding tax in America of between 15% and 30% on their dividends.
On the other hand, we have to be realistic and admit that while the best European dividend stocks are prestigious, those included in the US selection often have an advantage in terms of liquidity, size and stability.
The Pros and Cons of the Dividend Aristocrats
There are downsides to investing in the best European dividend stocks.
First of all, if a company is able to pay and increase its dividend consistently for so many years, it’s definitely a financially sound company.
However, I have to remind myself that every time they pay a dividend, they are taking money out of the company rather than reinvesting it.
Another thing that can worry an investor in such stocks is that the share price may not tend to rise, as is often the case with growth stocks.
Generally speaking, however, these are solid and generous companies, so let’s not look for the fly in the ointment.
- Stocks with high dividends may generate lower capital gains
- All dividend payments create taxable situations
- The company prefers to pay a dividend because it does not have the option of reinvesting the cash.
- Dividend cash flow looks good and provides stable income for shareholders
- Dividend growth can be a sign of a strong financial position
Here are some of the fundamental metrics we need to take into account when analyzing dividend stocks:
- Dividend & earnings per share
- Indicated dividend yield
- Pay-out ratio
Dividend Kings or Dividend Aristocrats?
Not all Dividend Aristocrats can be Kings, but most Kings can be Aristocrats.
Why is that?
Dividend Kings are companies that have paid increasing dividends for +50 years.
So obviously there are fewer Kings than Aristocrats.
Performance of the S&P Europe 350 Dividend Aristocrats Index
Here is the official performance of the S&P Europe 350 Dividend Aristocrats in a chart:
Here below is a performance comparison between the ordinary index and the Dividend Aristocrats:
Stocks with the highest dividend yield in Europe
Here is the list of the European stocks that pay the highest dividend but which also have a market cap of over 3 billion:
- Endesa, a Spanish power company, with an indicated dividend yield of 8.9%
- Enagas, a Spanish natural gas transportation company, with a dividend yield of 8.2%
- Mapfre S.A , a Spanish insurance company, with an indicated dividend yield of 7.5%
- Stellantis, an Italian-international car maker, with an dividend yield of about 8.1%
- Intesa Sanpaolo, an Italian bank group, with a dividend yield of approximately 6.7%
- DHL Group, a German logistics company, with a dividend yield of 5.4%
- Munich RE, a German reinsurance company, with a dividend yield of 4.9%
- NXP Semiconductors, a Dutch company, with a dividend yield of 4.6%
- Heineken, a Dutch brewing company, with an indicated dividend yield of 4.5%
- Trane Technologies, an Irish industrial company, with a dividend yield of 4.2%
This is like the Top 10 european dividend stocks, but better.
I do my best to keep these numbers updated but don’t trust me and do your down research.
What European country has the highest Dividend Stocks?
Here is a map of the countries in Europe that pay the highest dividends:
List of Europe’s most sustainable dividends from Morningstar
Sustainability is a crucial aspect of dividend investing.
A super-high dividend is worth nothing if it is not sustainable over time.
Here is a part of a list from Morningstar that I have ranked by best dividend in Europe that are also sustainable:
|5 Year Dividend Yield
|Hennes & Mauritz
|British American Tobacco
|Zurich Insurance Group
These are not monthly dividend stocks Europe.
Do we have the Dogs of the Dow in Europe?
We cannot have the Dogs of the Dow in Europe because we lack the Dow Jones index.
However, we could do something similar with the Eurostoxx 600 and list the best dividend stocks within the Eurozone companies.
The famous Dividend Aristocrats are a smaller group of S&P 500 companies with 25+ years of consecutive dividend increases. Rising dividends for 25 years in a row is anything but easy.
Video Dividend Aristocrats in Europe
Dividend Aristocrats Germany
Yes, of course Germany has its own list of the best dividend yield stocks. Here are some of the best Deutsche Dividend Stocks:
- ALV. Allianz
- BAS. BASF SE
- MBG. Mercedes-Benz Group
- FNTN. freenet
- EVK. Evonik
- O2D. Telefonica Deutschland Holding
- AT1. Aroundtown SA
The companies above have a long and stable dividend history.
What is inside the STOXX Europe Select Dividend 30 UCITS ETF?
The most popular European fund for dividend stocks is the iShares STOXX Europe Select Dividend 30 UCITS ETF.
This must probably include some of the most reliable stocks in the Eurozone, right?
Here are the main components:
One more index to mention is the S&P Euro High Yield Dividend Aristocrats Index. That one is used to measure the performance of the 40 most paying dividend companies in the Eurozone that are also included in the S&P Europe Broad Market Index (BMI).
The Noble 30 aristocrats
There is a European researcher who has done a great job of finding some of the best dividend aristocrats with a long track record. He specialises in dividend research and his work is here.
How to invest in the European Dividend Aristocrats?
In order to invest in the best dividend stocks I need a stock broker.
Some stock brokers are cheap, other ask for a monthly fee that includes a number of trades. It is up to you.
I am using Freedom24 to buy most of my stocks lately:
One of the hardest things is not to invest in the best dividend yield stocks in Europe.
The hardest thing is to hold them and keep them in the portfolio for many years.
The big money is not in the buying or selling, but in the waiting― Charlie Munger
Conclusions on the best dividend stocks in Europe
Investing is a risky business, especially for those who venture into stock picking.
Finding European companies that pay sustainable and growing dividends is not easy.
That is why it is healthy to know exactly which are the best dividend-paying companies in Europe.
The European Dividend Aristocrats Index currently contains 40 stocks. I wanted to improve that list by selectièng only 15 best ones with a longer track record of dividend growth.
The aim is not just to find the European stocks that pay the highest dividends, that would be easy. What I want to do is select only those that have been able to grow in the past, during dramatic times for the markets.
So, by applying some of the parameters used in the US to filter out dividend aristocrats, I have come up with a list of strong, reliable and sustainable stocks that are most likely to continue paying growing dividends in the future.
Please note: Investments in securities and other financial instruments always involve the risk of loss of your capital. The forecast or past performance is no guarantee of future results. It is essential to do your own analysis before making any investment
These are my true European Dividend Aristocrats stocks, add yours in the comments below.
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