Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip.
In the first quarter of 2024, the top-performing dividend-payers included Italian heavy machinery company Iveco Group (IVG), Italian insurance firm Unipol Gruppo (UNI), and Italian engineering and construction company Maire Tecnimont (MAIRE).
To find the quarter's 10 best-performing income-focused stocks, we screened the Morningstar Eurozone index – which measures the performance of the eurozone's broad regional markets, targeting the top 97% of stocks by market capitalisation – for companies with a forward dividend yield of at least 1.5%, excluding real estate investment trusts.
The Best-Performing Eurozone Dividend Stocks of Q1 2024
1. Iveco Group (IVG)
2. Unipol Gruppo (UNI)
3. Maire Tecnimont (MAIRE)
4. Rubis (RUI)
5. BPER Banca (BPE)
6. UniCredit (UCG)
7. Sarantis Group (SAR)
8. Daimler Truck (DTG)
9. Laboratorios Farmaceuticos Rovi (ROVI)
10. Banco Bilbao Vizcaya Argentaria (BBVA)
How Have Dividend Stocks Performed?
The Morningstar Eurozone Dividend Yield Focus index, which tracks the performance of high-quality, dividend-paying stocks listed in Europe, rose 2.5% over the past month and 7.1% over the past year.
The overall eurozone stock market, as measured by the Morningstar Eurozone index, has gained 9.9% on the quarter and 17.2% on the year.
Yields and Metrics for Q1's Best-Performing Dividend Stocks
Iveco Group
Italian heavy machinery company Iveco rose 69.4% in the first quarter and gained 58.2% over the past 12 months. Trading at €13.80 per share, its stock has a forward dividend yield of 1.59%. The stock, which has no economic moat, is currently trading at a 13% discount to its quantitative fair value estimate of €15.81 per share, leaving it with a quantitative Morningstar Rating of 4 stars.
Unipol Gruppo
Italian insurer Unipol rose 50.4% in the first quarter and gained 71.6% over the past 12 months. At €7.77 per share, its stock has a forward dividend yield of 4.76% and an annual dividend of €0.37 per share. The stock, which has no economic moat, is trading near its quantitative fair value estimate of €9.27 per share. It has a quantitative Morningstar Rating of 3 stars.
Maire Tecnimont
Italian engineering and construction company Maire Tecnimont gained 48% in the first quarter and rose 86.7% over the past 12 months. The stock's €7.26 price gives it a forward dividend yield of 2.71%. Maire Tecnimont pays investors an annual dividend of €0.12 per share. With a quantitative fair value estimate of €5.96 per share and no economic moat, the stock is moderately overvalued, trading at a 22% premium.
Rubis
French oil and gas company Rubis rose 45.5% in the first quarter and gained 40.5% over the past 12 months. Trading at €32.74 per share, Rubis stock has a forward dividend yield of 5.86% and an annual dividend of €1.92 per share. The stock, which has no economic moat, is trading near its quantitative fair value estimate of €36.33 per share. It has a quantitative Morningstar Rating of 3 stars.
BPER Banca
Italian bank BPER Banca gained 44.7% in the first quarter and rose 98% over the past 12 months. Trading at €4.38 per share, its forward dividend yield is 6.85%. BPER Banca pays investors €0.12 per share annually. The stock, which has no economic moat, is trading near its quantitative fair value estimate of €5.13 per share. It has a quantitative Morningstar Rating of 3 stars.
UniCredit
Italian bank UniCredit gained 43.2% in the first quarter and rose 107.7% over the past 12 months. At €35.17 per share, UniCredit stock has a forward dividend yield of 5.13% and an annual dividend of €0.99 per share. The stock, which has no economic moat, is trading near its fair value estimate of €36.33 per share. It has a Morningstar Rating of 3 stars.
Sarantis Group
Greek household and personal products company Sarantis rose 40.1% in the first quarter and gained 74.1% over the past 12 months. Trading at €11.74 per share, Sarantis stock has a forward dividend yield of 1.91% and an annual dividend of €0.15 per share. The stock, which has no economic moat, is trading near its quantitative fair value estimate of €11.44 per share. It has a quantitative Morningstar Rating of 3 stars.
Daimler Truck
German heavy machinery company Daimler Truck rose 37.2% in the first quarter and gained 54.9% over the past 12 months. Trading at €46.79 per share, Daimler Truck stock has a forward dividend yield of 4.06% and pays investors an annual dividend of €1.30 per share. The stock, which has no economic moat, is currently trading near its quantitative fair value estimate of €45.37 per share, leaving it with a quantitative Morningstar Rating of 3 stars.
Laboratorios Farmaceuticos Rovi
Spanish biotechnology firm Laboratorios Farmaceuticos Rovi gained 34.4% in the first quarter and rose 113.6% over the past 12 months. The stock's €80.90 price gives it a forward dividend yield of 1.6%. Laboratorios Farmaceuticos Rovi pays investors an annual dividend of €1.29 per share. With a quantitative fair value estimate of €66.04 per share and a narrow economic moat, the stock is significantly overvalued, trading at a 22% premium. It has a quantitative Morningstar Rating of 1 star.
Banco Bilbao Vizcaya Argentaria (BBVA)
Spanish bank BBVA rose 34.2% in the first quarter and gained 75.2% over the past 12 months. At €11.04 per share, BBVA has a forward dividend yield of 4.98% and an annual dividend of €0.47 per share. The stock, which has a narrow economic moat, is trading near its fair value estimate of €11.51 per share. It has a Morningstar Rating of 3 stars.
What Is the Morningstar Eurozone Index?
The Morningstar Eurozone index measures the performance of the eurozone's broad regional markets, targeting the top 97% of stocks by market capitalisation. The index does not incorporate environmental, social, or governance criteria.
What Is the Morningstar Eurozone Dividend Yield Focus Index?
The Morningstar Eurozone Dividend Yield Focus index captures the performance of a portfolio of high-quality, dividend-paying securities.
It's a subset of the Morningstar Eurozone index (which represents 97% of the equity market capitalisation) that includes only stocks that pay dividends. The stocks are screened for economic moat and financial strength compared to others in their sector. Real estate investment trusts are excluded.
From there, the 25 highest-yielding stocks are included in the index, weighted by the dollar value of the dividends. See the full rulebook here.
The Best Dividend Stock Leaders: More Ideas to Consider
Investors who would like to uncover more top-performing or cheap dividend stocks to research further can do the following:
• Review the full list of Dividend stocks included in the Morningstar Eurozone Dividend Yield Focus index. Those dividend stocks with Morningstar Ratings of 4 or 5 stars are undervalued, according to our metrics.
• Read our monthly analysis of the latest dividend moves among the top FTSE 100 dividend payers.
• Use our Morningstar Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures such as price/earnings, and more.
• Use Morningstar Portfolio Manager to build a watchlist of the best dividend stocks and create a view that allows you to easily follow the valuations, ratings, and dividend yields of the stocks in your list.
When it comes to buying stocks, it’s more than just dividends. Read here how valuations and competitive advantages – known as economic moats – matter when it comes to a stock’s potential for outperformance.
Companies that are not formally covered by a Morningstar analyst have quantitative ratings. These companies are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative moat, fair value, and uncertainty rating.
This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Sunniva Kolostyak.
As part of our mission to put more information into the hands of investors, this article was compiled from Morningstar’s data and independent research using automation technology. The original article was written by Morningstar reporters and editors. This updated version was reviewed by an editor.
