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 second quarter of 2024, the top-performing dividend-payers included French metals and mining firm Eramet (ERA), Belgian chemical company Solvay (SOLB), and French oil and gas company Esso (ES).
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 Q2 2024
1. Eramet (ERA)
2. Solvay (SOLB)
3. Esso (ES)
4. Galp Energia (GALP)
5. Kemira (KEMIRA)
6. Wärtsilä (WRT1V)
7. MFE-MediaForEurope Class B (MFEB)
8. Banco de Sabadell (SAB)
9. Van Lanschot Kempen (VLK)
10. Unipol Gruppo (UNI)
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, was roughly flat over the past quarter, but has risen 4.6% over the past year.
The overall eurozone stock market, as measured by the Morningstar Eurozone Index, has lost 1.3% on the quarter, but has risen 12.2% on the year.
Yields and Metrics for Q2's Best-Performing Dividend Stocks
Eramet
French metals and mining firm Eramet rose 35.8% in the second quarter and gained 14.3% over the past 12 months. Trading at €94.15 per share, its stock has a forward dividend yield of 1.59%. Eramet pays investors a trailing 12-month dividend of €3.50 per share. The stock has a quantitative Morningstar Rating of 3 stars.
Solvay
Belgian chemical company Solvay rose 33.1% in the second quarter and gained 24.2% over the past 12 months. At €32.87 per share, its stock has a forward dividend yield of 4.93% and a trailing 12-month dividend of €4.13 per share. It has a quantitative Morningstar Rating of 3 stars.
Esso
French oil and gas company Esso gained 31.2% in the second quarter and rose 233.6% over the past 12 months. The stock's €164.40 price gives it a forward dividend yield of 1.82%. Esso pays investors a trailing 12-month dividend of €2 per share. The stock has a quantitative Morningstar Rating of 4 stars.
Galp Energia
Portuguese oil and gas firm Galp Energia rose 30.5% in the second quarter and gained 89.0% over the past 12 months. Trading at €19.72 per share, Galp Energia stock has a forward dividend yield of 2.74% and a trailing 12-month dividend of €0.53 per share. It has a quantitative Morningstar Rating of 3 stars.
Kemira
Finnish chemical company Kemira gained 29.9% in the second quarter and rose 60.5% over the past 12 months. Trading at €22.76 per share, its forward dividend yield is 2.99%. Kemira pays investors a trailing 12-month dividend of €0.65 per share. It has a quantitative Morningstar Rating of 3 stars.
Wärtsilä
Finnish specialty industrial machinery firm Wärtsilä gained 27.8% in the second quarter and rose 77.3% over the past 12 months. At €18 per share, Wärtsilä stock has a forward dividend yield of 1.78% and a trailing 12-month dividend of €0.29 per share. The stock, which has a wide economic moat, is moderately overvalued, trading 39% above its fair value estimate of €13 per share. It has a Morningstar Rating of 2 stars.
MFE-MediaForEurope Class B
Italian broadcasting company MediaForEurope rose 25.9% in the second quarter and gained 22.4% over the past 12 months. Trading at €4.05 per share, MFE stock has a forward dividend yield of 6.17% and a trailing 12-month dividend of €0.25 per share. It has a quantitative Morningstar Rating of 4 stars.
Banco de Sabadell
Spanish bank Banco de Sabadell rose 25.8% in the second quarter and gained 76.5% over the past 12 months. Trading at €1.80 per share, Banco de Sabadell stock has a forward dividend yield of 3.33% and pays investors a trailing 12-month dividend of €0.03 per share. The stock has a quantitative Morningstar Rating of 3 stars.
Van Lanschot Kempen
Dutch bank Van Lanschot Kempen gained 25.4% in the second quarter and rose 35.2% over the past 12 months. The stock's €37.50 price gives it a forward dividend yield of 10.67%. Van Lanschot Kempen pays investors a trailing 12-month dividend of €3.75 per share. The stock has a quantitative Morningstar Rating of 3 stars.
Unipol Gruppo
Italian insurance firm Unipol rose 24.4% in the second quarter and gained 97.5% over the past 12 months. At €9.28 per share, Unipol has a forward dividend yield of 4.09% and a trailing 12-month dividend of €0.37 per share. It has a quantitative Morningstar Rating of 4 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.
• Watch this video to learn how Morningstar uses the star rating, moat rating and other metrics to evaluate stocks.
Companies that are not formally covered by a Morningstar analyst are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative star rating.
This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Sunniva Kolostyak.
This article was generated with the help of automation and reviewed by Morningstar editors.
