TOP 20 best European dividend stocks.

You’re probably familiar with S&P500 dividend aristocrats who have been increasing their payouts for 25 years or more.

Well, the European dividend aristocrats agree. To qualify for a European royalty payment, a company must show ten or more years of stable or growing dividends. However, these companies also provide investors with diversification and a much more reasonable valuation than their American counterparts.
And another advantage is that European dividend aristocrats give significantly more. They collectively give 3.2% versus 1.9% for US dividend aristocrats on average according to one of the largest online stock brokers Forex.com.

Alcon (ALC).

Market value: $27.5 billion.

Dividend yield: **.

Alcon is a global leader in producing eye care devices and services in vision surgery and treatment. Headquartered in Geneva, Switzerland, the company received more than $7 billion from sales in more than 140 countries. Alcon became a stand-alone player after parent company Novartis spun off the company in April.

Ophthalmic care is an industry with a turnover of $ 23 billion. It is projected to grow at 4% a year due to an ageing population, a growing middle class in emerging markets, longer computer usage times, and improved treatment options. Alcon, already a dominant player in ophthalmology, has more than 100 active products to drive future growth. It has also expanded its manufacturing capabilities with a new contact lens manufacturing platform, reducing costs and increasing output by 40%.

** – Since separating from Novartis, Alcon has not yet paid a cash dividend. However, it made its first payment of 10% of the 2019 profit in 2020. Alcon shares its parent company’s track record of 22 consecutive years of continuous dividend growth.

Ashtead Group (ASHTY).

Market value: $14.1 billion.

Dividend yield: 1,6%.

The UK – based Ashtead Group (ASHTY) is a leading international equipment rental company with significant operations in North America. The company rents out industrial and construction equipment to customers for use in construction projects, entertainment and mass events, site maintenance and emergency response.

Sunbelt’s US division, owned by Ashtead Group, is America’s second-largest equipment rental business, with 773 offices and accounting for 85% of revenue. Sunbelt also has 67 branches in Canada, accounting for 4% of the Canadian market share and the same amount of Ashtead’s payment. The remaining sales are provided by A-Plant, the UK’s largest equipment rental business, with 196 rental locations.

In fiscal 2019, equipment rental revenue increased by 18% compared to last year, and earnings per share increased by 33%. It is mainly due to Sunbelt US, whose sales increased by 19%. Sunbelt Canada’s revenue grew by 55% of sales growth.

Ashtead Group is expanding both through new developments and ongoing acquisitions. Last year, the company completed 24 acquisitions, mainly in the United States and Canada, and expanded its speciality operations.

ASHTY’s shares performed exceptionally well in 2019, rising 47% compared to 16% for the iShares MSCI United Kingdom ETF (EWU). In addition, the latest increase in its dividend resulted in a 10% increase in its dividend for the first half of 2020 (Like many European companies, Ashtead Group pays smaller interim dividends and larger final payments.)

Associated British Foods (ASBFY).

Market value: $25.4 billion.

Dividend yield: 2,48%.

Associated British Foods (ASBFY) is a diversified global food, ingredients and retail group operating in 52 countries.

ABF operates in five business segments – Sugar, Agriculture, Retail, Grocery and Ingredients. The AB Sugar division is a global leader in sugar production with a capacity of 4 million tons per year. Meanwhile, its grocery business includes familiar brands such as Mazola Corn Oil, Karo Corn Syrup, Twinings Tea, and Truvia sweetener.

80% of the company’s businesses recorded sales growth in 2019, with Sugar’s sales volume declining due to deregulation of the European Union market. Adjusted operating profit growth was driven by food and retail sales. The latter operates under the Primark brand – one of Europe’s largest clothing retailers with 373 stores in 11 countries. It also works in the US.

Associated British Foods ‘ dividend rose 37% between 2015 and 2019, although it has only recently grown by 3%. However, this is the 19th consecutive year of payment growth.

BAE Systems (BAESY).

Market value: $24.3 billion.

Dividend yield: 4,47%.

BAE Systems (BAESY) is the UK’s largest defence contractor and a primary weapons supplier to the US Armed forces, accounting for more than 40% of its annual sales. BAE System’s core business is military aviation, but the company also has significant activities in marine vessels, ground-based military equipment, and cyber intelligence.

Revenue grew by almost 7% in the first half of 2019, and earnings per share increased by 11%. It results from expanded production programs for electronic warfare systems for F-35 aircraft, Typhoon and Hawk fighters, Dreadnought aircraft carriers for the Royal Navy of Great Britain and amphibious combat vehicles for the US Marine Corps. In addition, the company entered the related market by acquiring Riptide Autonomous Solutions, a developer of uncrewed underwater vehicles.

Last contracts awarded to BAE Systems include $2.7 billion from the US Navy for advanced precision weapons systems, $437 million from the US Army for open-source support for army intelligence and expansion to $269 million for the production of Bradley combat vehicles.

BAE Systems pays a semi-annual dividend and has increased payments for 15 consecutive years, including a 2% increase in the prize last year.

British American Tobacco (BTI).

Market value: $90.4 billion.

Dividend yield: 7,73%.

British American Tobacco – BTI) is the world’s No. 2 cigarette manufacturer by sales volume – after Philip Morris International (PM). BTI operates in 180 countries and has a leading market position in more than 50 countries. Cigarette sales are mainly driven by five key brands: Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans. BTI also added popular American brands such as Newport, Camel, and Natural American Spirit through its acquisition of Reynolds American in 2017.

Cigarette sales are declining, and tobacco companies rely on new product categories such as e-cigarettes and snus to drive growth. British American Tobacco owns two of the market’s leading e-cigarette brands (Vype and Vuse) and several popular snus brands (Epok, Lyft and Velo). The company expects that by 2024, the annual sales volume of new product categories will be more than $6 billion.

To this end, BTI is optimizing operations to become more flexible and free up cash flow invested in new products. In addition, BTI recently announced that it would cut 2,300 jobs, reduce management levels, and merge into a smaller but larger division.

The European dividend aristocrat switched from semi-annual to quarterly dividends in 2018. As a result, it increased its quarterly payouts by 4% in 2019, achieving its 21st consecutive annual growth.

Bunzl (BZLFY).

Market value: $9.4 billion.

Dividend yield: 2,14%.

Bunzl (BZLFY), a British company – is an international distributor of packaging and cleaning products, safety equipment, and healthcare supplies. Its main clients are food processing companies, restaurants, grocery stores, industrial companies, facilities management companies, retail chains and medical institutions. So customers rely on Bunzl to reduce purchasing costs and working capital requirements.

Although Bunzl is an international operator, approximately 60% of its sales are North America. Much of this global reach has been driven by mergers and acquisitions( M&A), which have also been a significant driver of the company’s growth. Since 2004, Bunzl has completed 157 acquisitions, expanding its presence from 12 to 31 countries. In addition, the markets served by Bunzl are highly fragmented, which creates endless opportunities to enter new countries and product categories through acquisitions.

Over the past 15 years, Bunzl has delivered 10% average annual sales growth and 11% adjusted EPS expansion. The company also increased its semi-annual dividend for 26 consecutive years.

Burberry Group (BURBY).

Market value: $11.3 billion.

Dividend yield: 2,94%.

English Burberry Group (BURBY) is a global seller of luxury clothing and leather accessories, known worldwide for its iconic Burberry cage. The company operates 431 in-house stores and 44 franchised stores in 44 countries. The largest share of Burberry Group’s sales (41%) comes from its stores in the Asia-Pacific region, followed by Europe-Middle East-India-Africa (36%) and the Americas (23%).

Three years ago, the company launched a multi-year plan to reinvigorate its brand, attract more Gen Y and Gen Z customers, and reduce costs. As a result, Burberry Group has hired one of the leading French fashion designers to create a new clothing collection and develop its brand. The new clothing collection stimulated double-digit sales growth in the company’s clothing business, with new designs accounting for 50% of the products offered. Burberry Group also benefited from asset sales in China, which led to a single-digit increase in its Asian stores.

By 2020, the company will have upgraded more than 100 flagship stores in large and medium-sized cities. It also divested non-core assets and closed 38 lagging stores. In addition, to strengthen the perception of its luxury brand, Burberry Group is reducing space in mid-level American department stores and gradually closing non-luxury outlets.

Burberry Group has been paying dividends since 2007, increasing them for more than ten consecutive years.

Coloplast (CLPBY).

Market value: $24.6 billion.

Dividend yield: 1,56%.

Denmark’s Coloplast (CLPBY) is a global leader in producing human health products. These are not very good markets, but they are growing faster than the medical market as a whole. The company is also one of the top five companies in wound care and interventional urology. Coloplast accounts for 60% of sales from Europe, 23% from other developed countries and 17% from emerging markets.

The interventional urology business has grown thanks to sales of penile implants under the Titan brand name significantly. However, Coloplast recently considered selling this business because the FDA ordered it and its main competitor Boston Scientific (BSX), to stop selling surgical meshes for transvaginal repair, which have been the subject of growing lawsuits. As a result, the company decided to keep its business in interventional urology.

Free cash flow per share increased by 10%, and the company rewarded investors with a 6% increase in its dividend. It led to the 23rd consecutive increase in Coloplast’s dividend – quite a long time for European dividend aristocrats.

Coloplast expects new products to deliver annual sales growth of 7% to 8% and is investing in new technologies, such as a new catheter platform for incontinence treatment, to ensure long-term growth.

Compass Group (CMPGY).

Market value: $38.2 billion.

Dividend yield: 6,01%.

The British company Compass Group (CMPGY) is a global leader in public catering, operating in 45 countries and represented in more than 55,000 customer points. CMPGY serves more than 5.5 billion meals a year to customers, of which 38% are business and manufacturing, 23% are healthcare and senior citizens, 20% are education, 12% are sports and recreation, and 7% are defence and offshore.

North America is its primary market, accounting for 62% of its revenue. Europe accounts for 24% of sales, while the rest of the world accounts for 14%.

Compass Group provides on-site catering services to significant customers, including Microsoft (MSFT), Google, Boeing (BA), Intel (INTC) and dozens of other Fortune 500 companies. The company prefers an organic growth strategy, but it cannot add new features or scale and return investment within two years.

The company has weakened its position in Europe, where it plans to cut costs, but it has a firm place in North America and improved in the rest of the world. Net income per share increased by 6% in 2019 compared to the same period last year, increasing free cash flow by 9.3%.

It naturally affected the semi-annual dividend, which was increased by 6.1% in 2019, marking its 18th consecutive increase.

Croda International (COIHY).

Market value: $8.5 billion.

Dividend yield: 2,04%.

UK-based Croda International (COIHY) produces speciality chemicals with high-performance characteristics used in the food industry, personal care products, manufacturing technologies, and industrial chemical applications. The two largest companies – personal care products and manufacturing technologies-together account for two-thirds of sales.

Europe and the Middle East account for most of Croda International’s sales, but the company is also expanding its presence in North America, which generated 30% of revenue last year.

The catalyst for Croda’s recent growth has been new and protected products. Sales of new products grew for six consecutive years and twice as fast as the total portfolio.

The US-China trade dispute negatively impacted sales of personal care products. In contrast, sales in the high-tech sector slowed due to weaker end markets in the automotive industry and polymers.

However, reducing capital expenditures allowed Croda to generate 50% higher free cash flow. In addition, the company enjoyed a stronger second half due to the commissioning of additional production facilities and the launch of new products.

CITY International has been increasing its dividend annually since 2001. Rewards are paid semi-annually, and the company sometimes pays special dividends in addition. Excluding these special payments, the company’s full-year 2018 dividend improved by 7%, and in 2019, the company increased its interim dividend by 4%.

Diageo (DEO).

Market value: $97.8 billion.

Dividend yield: 2,68%.

The British firm Diageo (DEO) is a global alcoholic beverage company with more than 180 countries sales. The company owns many best-selling liqueurs, including Johnnie Walker whiskey, Crown Royal, Captain Morgan rum, Smirnoff vodka, Tanqueray and Gordon’s gin, Bailey’s liqueur and Guinness beer.

In August 2019, Diageo entered the soft drink segment by purchasing a stake in Seedlip, the world’s first distilled soft drink brand. It can find Seedlip drinks in 25 countries. Diageo also expanded its presence in India. It increased its stake in United Spirits Limited, India’s largest alcoholic beverage company by volume and globally the second-largest alcoholic beverage company.

The company aims to accelerate the growth of its premium brands with higher margins in its portfolio and does so by reducing non-core brands. Nineteen such brands were recently sold, including Seagram’s VO Canadian whiskey and Goldschlager schnapps. It is also building its business in China, partnering with a local spirits producer to launch a new whiskey brand in the Chinese market.

The semi-annual dividend has been paid steadily since 1998, and it is one of the European dividend aristocrats whose payments have been increasing for more than two decades. In 2019, the company also approved a three-year share repurchase program for $5.8 billion.

Enagas (ENGGY).

Market value: $5,9 billion.

Dividend yield: 7,54%.

Spain’s leading natural gas carrier Enagas (ENGGY) supplies natural gas to eight European countries via a 10,000 km pipeline network. And it is benefiting from the country’s highest energy demand in a decade, up almost 17% from a year earlier. Spain’s demand for natural gas used to generate electricity has increased enormously as a result of economic growth, as well as the use of natural gas instead of coal as a fuel source.

Also, Enagas is diversifying its business outside the EU by acquiring a stake in Tallgrass Energy LP (TGE) – a natural gas distributor that operates three interstate gas pipelines across the US. In addition, the company has a significant stake in the Trans-Adriatic Pipeline (TAP), which is supplied by natural gas from the Caspian Sea to Europe. In addition, Enagas participates in construction pipelines in Greece and Albania.

The dividend aristocrat increased its payouts by 5% in 2019, achieving 17 consecutive years of revenue growth.

EssilorLuxottica (ESLOY).

Market value: 67.5 billion.

Dividend yield: 1,58%.

French – Italian eyewear giant EssilorLuxottica (ESLOY) – an optical giant-is the result of the merger in 2018 of Essilor (Varilux, Transitions and Foster Grant) and Luxottica (Ray-Ban and Oakley frames, as well as retail sales of Sunglasses Hut and LensCrafters) franchises.

In July 2019, the company agreed to acquire Dutch optical group Grandvision for up to $8 billion in cash. The deal gave the company 5,300 eyewear stores across Europe and a global network of more than 7,000 retail stores.

The company believes that creating a single supply chain and consolidating the network of prescription laboratories will reduce costs and achieve significant savings over the next three years. In addition, in August 2019, Essilor Luxottica acquired the world’s leading manufacturer of optical glass lenses (Barberini) and an Australian manufacturer of ophthalmic instruments (Optimed). It allowed it to expand its production capacity.

The catalyst for future growth was also the extension of the exclusive license agreement with Chanel, concerning the development, production and distribution of prescription glasses and sunglasses for the brand over the next eight years.

EssilorLuxottica pays an annual dividend and has increased its cash payments for more than a quarter of a century.

Flutter Entertainment (PDYPY).

Market value: $9.1 billion.

Dividend yield: 1,52%.

It created Flutter Entertainment (PDYPY) due to two leading bookmakers in the UK – Paddy Power and Betfair. Headquartered in Dublin, PDYPY is a global provider of sports betting, games and entertainment. Flutter Entertainment has 6 million active customers in 100 countries, processes 3 billion online transactions annually, and places bets in 620 retail outlets.

In 2019, the FanDuel Group division signed an agreement with Major League Baseball to access MLB data and logos, retail bookmaker outlets and online sports betting products. Earlier that year, Flutter Entertainment acquired a 51% stake in Adjarabet, the Eastern European online gaming market leader, and plans to buy back the remaining stake by 2022. Between 2016 and 2018, the Georgian gaming market served by Adjarabet grew by 40% annually.

Flutter Entertainment will also soon double in size, as it bought Canada’s The Stars Group, the world’s largest public bookmaker and owner of PokerStars. The combined business has 13 million customers in 100 countries, with revenue of $4.7 billion and own three of the UK’s top seven online sports betting brands.
Flutter Entertainment has been paying a growing dividend through various companies for almost two decades. However, in some last years, the growth rate has slowed down due to the active use of mergers and acquisitions.

Fresenius Medical Care (FMS).

Market value: 21.9 billion.

Dividend yield: 1,7%.

The German company Fresenius Medical Care (FMS) provides dialysis services – approximately to 340,000 patients by nearly 4,000 dialysis clinics worldwide. In addition, FMS sells dialysis-related products and services to about 3.4 million patients worldwide. The FMS’s growth has been driven by acquisitions, including Sparsh Nephrocare, Xenios, Cura Group and NxStage Medical.

North America accounts for 70% of the company’s revenue. Fresenius Medical Care also introduced a low-cost dialysis machine specifically designed for emerging markets in China.

New products, such as the dialysis machine, should support Fresenius Medical Care’s continued organic sales growth. In October 2019, the FDA awarded the company breakthrough status for another new dialysis system being developed that prevents blood clotting without requiring blood-thinning drugs, which can have dangerous side effects. In addition, earlier in 2019, Fresenius Medical Care received breakthrough product status for its computer software that improves fluid management during dialysis.

The company has been paying dividends for more than two decades.

Fresenius SE (FSNUY).

Market value: 31.2 billion.

Dividend yield: 2,19%.

Germany’s Fresenius SE (FSNUY) is a global healthcare product and service leader. FSNUY is the largest private hospital operator in Europe (86 Germany’s and 50 Spain’s hospitals). It also provides construction, project development and maintenance services for groups of hospitals. It has a 31% stake in the Fresenius above Medical Care.

The company has grown organically and through continuous acquisitions. Also, it launches new products such as biosimilar drugs, while its construction and project development business is tapping into new demand for services in emerging markets.

Fresenius SE has provided dividend growth for 26 consecutive years, one of the oldest European dividend aristocrats. The total annual return of shareholders for the last ten years is 15%.

Groupe Bruxelles Lambert (GBLBY).

Market value: $13.7 billion.

Dividend yield: 3,84%.

The Belgian holding company Groupe Bruxelles Lambert (GBLBY) is one of the largest investment firms in Europe, with significant stakes in leading industry companies such as Adidas (ADDYY), Total SA (TOT) and Pernod Ricard (PDRDY). The company also owns the Sienna Group, which invests through many of the world’s leading fund managers. The value of its investment portfolio is about $21 billion.

In the first nine months of 2019, the company’s net asset value grew by 19% compared to the same period last year, while cash earnings grew by an impressive 47%. These financial results are primarily driven by Groupe Bruxelles Lambert’s successful revenue acquisition from selling high-yielding assets in the energy and utility sectors.

Sienna Group builds up Its portfolio of alternative assets. It includes investments in March Partners LP, the Technology and Innovation Fund, and joint investment with the Carlyle Group (TCGP) in the Spanish oil and gas company Cepsa.

The company has increased payouts for 16 consecutive years while delivering 11.5% of the annual total return to shareholders for 2012-19, which exceeds the 8.4% return for the Stoxx Europe 50 for the same period.

Halma (HLMA).

Market value: $10.5 billion.

Dividend yield: 0,76%.

Halma (HLMA) invests in a technology business that focuses on health, safety and the environment. The company’s industrial safety segment includes tools for detecting hazardous gas leaks and monitoring air quality. In addition, infrastructure Safety offers products for fire detection and extinguishing and safety monitoring. The environmental analysis focuses on water quality assessment and recovery, and the medical business has devices for analyzing eye health and blood pressure. Most of Halma’s sales are from Europe and USA.

Halma has achieved 16 years of sales and profit growth, combining organic growth driven by new products and services with niche acquisitions. The fiscal year 2019 increased by 13% – approximately 10% due to organic growth. But Halma has also benefited from niche acquisitions in the infrastructure security and healthcare markets. As a result, pre-tax profit increased by 20%.

Four decades of continuous payout growth place Halma in the elite class of European dividend aristocrats. In its fiscal year 2019 report, the company noted that as of March 2019, investing in Halma over the past decade would have generated 1,141% of revenue, more than double the Nasdaq Composite’s return.

Hermès International (HESAY).

Market value: $77.0 billion.

Dividend yield: 0,57%.

France’s Hermès International (HESAY) is one of the most recognizable luxury goods brands (it started as a saddle manufacturer more than 180 years ago).

However, Hermès grew up and in full swing. Currently, the company is known for its fashionable leather accessories, clothing, scarves and other consumer products. It sold through a worldwide network of more than 300 stores. And today, more than half of its sales are in the Asia-Pacific region, Europe-30%, and America-17%.

In 2019, revenue increased by 12% due to increased sales of new stores in Shanghai, Singapore and Thailand. Hermès International also opened its 36th store in the United States (in New York) and re-opened a Hawaiian store. In addition, sales of leather goods improved due to strong demand for its classic styles, and Hermès expanded its production capabilities. Clothing and accessories also performed well against the backdrop of a favourable reception for new ready-to-wear collections.

Hermès International has demonstrated stable annual development indicators over the past decade: sales growth of 13% and earnings per share growth of 18%. The company has also performed well for its investors, yielding 17.7% p. a. over the past five years, more than 11 percentage points better than French stocks as a whole.

In addition to decent pay raises, European Dividend Aristocrat sometimes pays extraordinary dividends.

England’s Imperial Brands (IMBBY).

Market value: $20.7 billion.

Dividend yield: 14,13%.

England’s Imperial Brands (IMBBY) is a global tobacco company that operates through Imperial Tobacco and sells cigarettes worldwide; Tabacalera’s cigar business, ITG Brands, sells cigarettes in the United States. In addition, Fontem Ventures vaping products and Logista distributes cigarettes and other products to 300,000 outlets across Europe.

IMBBY owns several popular cigarette brands, including John Player Special, Winston, Gauloises, Kool, West and Fine, and Montecristo and Habana cigars. Still, like other tobacco companies, it focuses on its next-generation vaping products, including the famous Blue – cigarette brand, to drive future sales growth.

The traditional tobacco business continues to grow in the single digits. Thus, the company recently launched a new heated Pulze tobacco product in Japan and several new oral tobacco products in Europe.

Imperial Brands plans to sell its premium cigar business, expecting revenue of up to $2.6 billion. And it aims to achieve annual savings of $260 million from a recently implemented cost-cutting program.

Imperial Brands is also unusual among British companies because it pays a quarterly dividend.

You can invest in stocks of almost any of the above-listed European dividend aristocrats by using the services of the largest brokers, Forex.com and CityIndex, an online broker Plus500, an online trading platform eToro and AvaTrade, social and copy trading platform ZuluTrade.

On our website, you can learn how to register on any specified trading brokerage platforms, open a trading account, choose a suitable financial instrument, study the offered trading conditions and rewards of any of them, and start trading directly.

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