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 February 2024, the top-performing dividend-payers included German aerospace and defense company Rheinmetall (RHM), Italian diversified insurance firm Unipol Gruppo (UNI), and Belgian biotechnology company UCB (UCB).
To find the month's 10 best-performing income-focused stocks, we screened the Morningstar Eurozone GR EUR 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 February 2024
1. Rheinmetall (RHM)
2. Unipol Gruppo (UNI)
3. UCB (UCB)
4. HENSOLDT (HAG)
5. Stellantis (STLA)
6. Be Semiconductor Industries (BESI)
7. Konecranes (KCR)
8. Vopak (VPK)
9. Cargotec (CGCBV)
10. Mercedes-Benz Group (MBG)
How Have Dividend Stocks Performed Over the Past Year?
In the 12 months leading up to February 29, the Morningstar Eurozone Dividend Yield Focus GR EUR index, which tracks the performance of high-quality, dividend-paying stocks listed in Europe, rose 7.9%.
The dividend yield focus index underperformed the overall eurozone stock market, which gained 12.5% over the 12-month period as measured by the Morningstar Eurozone GR EUR index.
Yields and Metrics for the Best-Performing Income Payers
Rheinmetall
German aerospace and defence company Rheinmetall rose 30.5% in February to end the last 12 months up 78%. Trading at €424 per share, its stock has a forward dividend yield of 1.01%. Rheinmetall pays investors an annual dividend of €4.30 per share. The wide-moat stock is currently trading near its fair value estimate of €445 per share.
Unipol Gruppo
Italian diversified insurance firm Unipol Gruppo rose 29% in February, leaving it up 56% over the past year. At €7.43 per share, its stock has a forward dividend yield of 4.98% and an annual dividend of €0.37 per share. The no-moat stock is moderately undervalued, trading 21% below its quantitative fair value estimate of €9.46 per share.
UCB
Belgian biotechnology company UCB gained 22% in February to end the last 12 months up 32.5%. The stock's €106.50 price gives it a forward dividend yield of 1.28%. UCB pays investors an annual dividend of €1.33 per share. With a fair value estimate of €99 per share, the no-moat stock is fairly valued.
HENSOLDT
German aerospace and defence firm HENSOLDT rose 21.5% in February, leaving it up 9.9% over the past year. Trading at €33.82 per share, HENSOLDT stock has a forward dividend yield of 1.18% and an annual dividend of €0.30 per share. The narrow-moat stock is trading near its quantitative fair value estimate of €33.89 per share.
Stellantis
US-Italian auto manufacturer Stellantis gained 19.6% in February to end the last 12 months up 58.3%. Trading at USD 26.26 per share, its forward dividend yield is 6.33%. Stellantis pays investors USD 1.34 per share annually. The no-moat stock is trading at a 36% discount to its fair value estimate of USD 41 per share, leaving it moderately undervalued.
Be Semiconductor Industries
Dutch semiconductor equipment and materials firm Be Semiconductor Industries gained 19.6% in February, leaving it up 131.7% over the past year. At €167.15 per share, Be Semiconductor Industries stock has a forward dividend yield of 1.29% and an annual dividend of €2.85 per share. The narrow-moat stock is moderately overvalued, trading 52% above its fair value estimate of €110 per share.
Konecranes
Finnish farm and heavy construction machinery company Konecranes rose 19.5% in February to end the last 12 months up 51.6%. Trading at €47.60 per share, Konecranes stock has a forward dividend yield of 2.84% and an annual dividend of €1.25 per share. The narrow-moat stock is trading near its quantitative fair value estimate of €49.95 per share.
Vopak
Dutch oil and gas midstream firm Vopak rose 18.8% in February, leaving it up 18.2% over the past year. Trading at €34.38 per share, Vopak stock has a forward dividend yield of 4.36% and pays investors an annual dividend of €1.30 per share. The no-moat stock is currently trading at a 16% discount to its quantitative fair value estimate of €41.06 per share, leaving it moderately undervalued.
Cargotec
Finnish farm and heavy construction machinery company Cargotec gained 18.7% in February to end the last 12 months up 32.5%. The stock's €62.50 price gives it a forward dividend yield of 2.16%. Cargotec pays investors an annual dividend of €1.35 per share. With a quantitative fair value estimate of €72.98 per share, the narrow-moat stock is fairly valued.
Mercedes-Benz Group
German auto manufacturer Mercedes-Benz rose 17.2% in February, leaving it up 8.5% over the past year. At €73.64 per share, Mercedes-Benz has a forward dividend yield of 7.2% and an annual dividend of €5.20 per share. The narrow-moat stock is moderately undervalued, trading 37% below its fair value estimate of €117 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.
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.
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.
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