Each month, we screen the 100 largest European companies by market capitalization in the Morningstar Europe Index to see which ones are due to pay a dividend. In January, nine European stocks will pay out income to investors: Here are the largest.
Key Morningstar Metrics for European Dividend Stocks
TotalEnergies TTE
Analyst: Allen Good, CFA
- Sector: Energy
- Industry: Oil & Gas Integrated
- Morningstar Rating: ★★★
- Economic Moat: None
- Price/Fair Value: 0.89
- Forward Dividend Yield: 6.09%
Allen Good, equity analyst for Morningstar, says:
“We rate Total’s shareholder distribution policy as appropriate. Total was one of the few oil majors to maintain the dividend in 2020 and took additional steps to reduce costs and capital spending to keep it affordable.
“The bulk of share repurchases occurred when share prices were below our fair value estimate and therefore looked reasonable. Its introduction of a variable distribution plan makes sense given the likely continued volatility of commodity prices during the remainder of the decade.”
GSK GSK
- Sector: Healthcare
- Industry: Drug Manufacturers - General
- Morningstar Rating: ★★★★
- Economic Moat: Wide
- Price/Fair Value: 0.83
- Forward Dividend Yield: 3.51%
Jay Lee, equity analyst for Morningstar, says:
“We view GSK’s dividends as historically a bit too high. Over the past five years, GSK has paid out a dividend at roughly 70% of normalized earnings, which has probably limited the ability to reinvest in the company through internal R&D and external acquisitions of new pipeline drugs. Additionally, the special dividend in 2016 seemed excessive and not needed.
“Following the divestment of the consumer group in 2022, GSK lowered the overall dividend to a level that is likely more appropriate for the earnings.”
National Grid NG.
- Sector: Utilities
- Industry: Utilities - Regulated Electric
- Morningstar Rating: ★★★★
- Economic Moat: None
- Price/Fair Value: 0.94
- Forward Dividend Yield: 4.14%
Tancrede Fulop, equity analyst for Morningstar, says:
“Shareholder distribution appears poor to us. The company used to be a dividend aristocrat as it increased its dividend every year between 1998 and 2024. Combined with high investments, this led to a deterioration of the financial headroom that entailed a credit rating downgrade in 2021.
“However, the company maintained its dividend policy indexed to inflation, which soared as of 2022. To fund a 50% investment step-up by 2029 driven by the energy transition, the group announced a highly dilutive rights issue in May 2024 and a rebase of its dividend on the new number of shares that will entail a 20% fall in 2025, by our estimates. Had the group cut its dividend earlier, it could have avoided such a painful decision for its shareholders.”
Enel ENEL
- Sector: Utilities
- Industry: Utilities - Diversified
- Morningstar Rating: ★★★
- Economic Moat: None
- Price/Fair Value: 1.08
- Forward Dividend Yield: 5.55%
Tancrede Fulop, equity analyst for Morningstar, says:
“Shareholder distribution looks appropriate to us. The group lifted its dividend floor from EUR 0.43 to EUR 0.46 in November 2024 with upside payment up to a 70% payout.”
