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 January 2024, the top-performing dividend-payers included Portuguese engineering and construction company Mota-Engil (EGL), French asset management firm Antin Infrastructure Partners (ANTIN), and Italian regional bank Banca Popolare di Sondrio (BPSO).
To find the month's top 10 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%, excluding real estate investment trusts.
The Best-Performing Eurozone Dividend Stocks of January 2024
1. Mota-Engil (EGL)
2. Antin Infrastructure Partners (ANTIN)
3. Banca Popolare di Sondrio (BPSO)
4. Indra Sistemas (IDR)
5. SAP (SAP)
6. HENSOLDT (HAG)
7. La Française des Jeux (FDJ)
8. Buzzi Unicem (BZU)
9. TF1 Groupe (TFI)
10. Secunet Security Networks (YSN)
How Have Dividend Stocks Performed Over the Past Year?
In the 12 months leading up to January 31, the Morningstar Eurozone Dividend Yield Focus index, which tracks the performance of high-quality, dividend-paying stocks listed in Europe, rose 9.7%.
Morningstar Eurozone vs. Morningstar Eurozone Dividend Yield Focus Indices
Source: Morningstar Direct, February 1, 2024
The dividend yield focus index performed roughly in line with the overall eurozone stock market, which gained 11.0% over the 12-month period as measured by the Morningstar Eurozone index.
Yields and Metrics for the Best-Performing Income Players
Mota-Engil
Portuguese engineering and construction company Mota-Engil rose 34.6% in January to end the last 12 months up 219.4%. Trading at €5.33 per share, its stock has a forward dividend yield of 1.88%. Mota-Engil pays investors an annual dividend of €0.40 per share. The no-moat stock is currently trading near its quantitative fair value estimate of €5.73 per share.
Antin Infrastructure Partners
French asset management firm Antin Infrastructure Partners rose 23.8% in January, leaving it down 14.8% over the past year. At €17.06 per share, its stock has a forward dividend yield of 3.75%, and an annual dividend of €1.28 per share. The narrow-moat stock is trading near its quantitative fair value estimate of €18.40 per share.
Banca Popolare di Sondrio
Italian regional bank Banca Popolare di Sondrio gained 20.3% in January to end the last 12 months up 62.7%. The stock's €7.05 price gives it a forward dividend yield of 3.97%. Banca Popolare di Sondrio pays investors an annual dividend of €1.12 per share. With a quantitative fair value estimate of €8.22 per share, the no-moat stock is fairly valued.
Indra Sistemas
Spanish information technology services firm Indra Sistemas rose 17.6% in January, leaving it up 49.3% over the past year. Trading at €16.47 per share, Indra Sistemas stock has a forward dividend yield of 1.52% and an annual dividend of €1 per share. The no-moat stock is trading near its quantitative fair value estimate of €16.96 per share.
SAP
German software company SAP gained 15.3% in January to end the last 12 months up 50.3%. Trading at €160.80 per share, its forward dividend yield is 1.27%. SAP pays investors €8.20 per share annually. The narrow-moat stock is trading at a 22% premium to its fair value estimate of €132 per share, leaving it moderately overvalued.
HENSOLDT
German aerospace and defense firm HENSOLDT gained 14.9% in January, leaving it up 5.6% over the past year. At €27.84 per share, HENSOLDT stock has a forward dividend yield of 1.08% and an annual dividend of €1.20 per share. The narrow-moat stock is trading near its quantitative fair value estimate of €31.17 per share.
La Française des Jeux
French gambling company La Française des Jeux rose 14.6% in January to end the last 12 months down 0.6%. Trading at €37.64 per share, La Française des Jeux stock has a forward dividend yield of 3.64% and an annual dividend of €5.48 per share. The wide-moat stock is trading near its quantitative fair value estimate of €37.25 per share.
Buzzi Unicem
Italian building materials firm Buzzi Unicem rose 14.5% in January, leaving it up 54.9% over the past year. Trading at €31.52 per share, Buzzi Unicem stock has a forward dividend yield of 1.43% and pays investors an annual dividend of €1.80 per share. The no-moat stock is currently trading near its quantitative fair value estimate of €33.23 per share.
TF1 Groupe
French broadcasting company TF1 Groupe gained 14.4% in January to end the last 12 months up 17.8%. The stock's €8.16 price gives it a forward dividend yield of 6.13%. TF1 Groupe pays investors an annual dividend of €2 per share. With a quantitative fair value estimate of €9.94 per share, the no-moat stock is moderately undervalued, trading at an 18% discount.
Secunet Security Networks
German software company Secunet Security Networks rose 13.6% in January, leaving it down 22.3% over the past year. At €165.80 per share, Secunet Security Networks has a forward dividend yield of 1.72% and an annual dividend of €11.44 per share. The narrow-moat stock is trading near its quantitative fair value estimate of €218.10 per share.
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 capitalization) 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.
This article was 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.
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.
