Morningstar

How Europe’s Largest Dividend Stocks Have Performed in 2025

UK and Swiss stocks dominate the list of best dividend performers so far this year.

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Key Takeaways

  • The Morningstar Europe Dividend Yield Focus Index has outperformed the Morningstar Europe Index so far this year.
  • Lloyds Banking Group and British American Tobacco were the best performing large-cap dividend stocks in the index.
  • Unilever and Deutsche Telekom were the worst performing stocks in the top 10 of the Morningstar Europe Dividend Yield Focus Index.

European large-cap dividend stocks have had a strong 2025 so far. The Morningstar Europe Dividend Yield Focus Index was up 17% in euros as of Nov. 17, compared with 15% for the wider Morningstar Europe Index. This is out of step with longer-term trends: over three years, for example, the dividend index has achieved an annualized return of 12.4% compared with 12.9% for the broader index.

The Best-Performing Large European Dividend Stocks

British American Tobacco BATS, the stock with the highest weight in the index, gained 41.5% in euros this year. The share price has benefited from the company’s positive news on shareholder rewards, as well as a re-rating of UK value stocks. In its half-year report, the FTSE 100 stock announced a material increase in its share buy-back program, adding GBP 200 million to raise the total to GBP 1.1 billion for 2025.

The second most heavily weighted stock in the index, Swiss pharmaceutical company Novartis NOVN, also posted a positive return of 25.3%, while peer Roche ROG gained 18.2% in Swiss francs.

The top performer in the top 10 holdings of the European dividend index in 2025 was the UK stock Lloyds Banking Group LLOY , with a 61.5% gain in euros. The company lifted profitability guidance for 2025 on lower expected loan losses and higher net interest income. Slower-than-expected interest rate cuts have supported UK financial stocks.

The Worst-Performing Large European Dividend Stocks

The biggest losses in the top 10 of the Europe Dividend Yield Focus Index were for Unilever ULVR, which fell 4.6% in euros and for Deutsche Telekom DTE which lost 2.6% as of Nov. 17.

Unilever has lagged the wider European stock market this year. According to Diana Radu, equity analyst at Morningstar, despite clear progress in its turnaround and strong execution in North America, Unilever’s overall volume growth remains modest and below its own targets, reflecting a still-subdued consumer environment.

Javier Correonero, equity analyst at Morningstar, says that despite Deutsche Telekom’s strong strategic position in Germany and the US, investor sentiment has been tempered by the sluggish growth in European telecoms, ongoing regulatory uncertainty, and the high capital requirements of fiber broadband rollout.

What Is the Morningstar Europe Dividend Focus Index?

The much broader Morningstar Europe Index measures the performance of large-, mid- and small-cap stocks in developed and emerging markets in Europe, representing the top 97% of the investable universe by market capitalization. Meanwhile the Morningstar Europe Dividend Yield Focus Index is designed to provide exposure to stocks from the Morningstar Europe Large-Mid Cap Index with attractive dividend yields and strong financial quality. Constituents are weighted in proportion to the value of their dividend payments.

Key Morningstar Metrics for Top European Dividend Stocks

British American Tobacco BATS

Analyst: Kristoffer Inton

Novartis NOVN

Analyst: Jay Lee

Roche ROG

Analyst: Karen Andersen, CFA

Sanofi SAN

Analyst: Jay Lee

Zurich Insurance Group ZURN

Analyst: Henry Heathfield, CFA

Unilever ULVR

Analyst: Diana Radu, CFA

Nestlé NESN

Analyst: Diana Radu, CFA

Lloyds Banking Group LLOY

Analyst: Niklas Kammer, CFA

Deutsche Telekom DTE

Analyst: Javier Correonero

Vinci DG

Analyst: Matthew Donen, CFA

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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