We recently compiled a list of the 10 Best European Dividend Stocks To Buy.In this article, we are going to take a look at where LyondellBasell Industries N.V. (NYSE:LYB) stands against the other European dividend stocks.
Dividend payouts for MSCI Europe companies hit a record €407 billion in 2023, and they are set to grow even more in 2024, with an expected increase to €433 billion, up about 6.5%. According to Allianz Global Investors, the total dividend payout is expected to reach €460 billion by 2025, marking a 13% rise from 2023. The dividend yield is also climbing. It stood at 3.47% at the end of 2023 and could go up to 3.67% in 2024. This is still well above the yield on long-term German government bonds, even after bond yields shot up in 2022. German companies in the MSCI index paid out a 3.3% dividend in 2023, with a projected rise to 3.53% in 2024. Meanwhile, companies from Norway, though still at the top, are expected to see a slight decline in their yield, from 7.2% in 2023 to 6.4% in 2024.
Dividends have had a huge impact on overall equity performance in Europe. Over the last 40 years, about 36% of MSCI Europe's total return has come from dividends. From 2019 to 2023, dividends made up almost half of the overall return, and from 2014 to 2018, they were responsible for most of it. On top of that, dividend-paying companies tend to have less volatile stock prices compared to those that don’t pay dividends.
Global dividends hit a record $1.66 trillion in 2023, and they're expected to reach $1.72 trillion in 2024, according to Janus Henderson. Dividend growth in 2023 was up 5%, with a 7.2% rise in Q4 alone. Banks were a major driver of this growth, delivering record payouts and benefiting from higher interest rates that boosted their margins. Although miners slowed down the overall growth, other industries like vehicles, utilities, software, food, and engineering showed strong performance, highlighting the value of having a diversified portfolio. Twenty-two countries saw record dividend payouts, with Europe (excluding the UK) and Japan playing a key role. The UK saw a 5.4% rise in dividends, and France, Germany, and Italy also set new records.
S&P Global Market Intelligence forecasted that Europe’s dividend payouts would hit €474 billion in 2024, which is a slight dip of 0.8% compared to last year. However, excluding special payments, ordinary dividends should rise by 4%, reaching a new high of €463 billion. Banks are leading the charge, making up 15% of the total dividend payouts, followed by capital goods and energy, both at 9%. The materials sector is set to see a 16% decrease in dividends, but it will still contribute about 6%, the same as utilities and food, beverage, and tobacco. The banking, capital goods, and pharmaceutical sectors are likely to see double-digit increases in their dividends, with banking staying strong at the top. On the flip side, the transportation sector might experience a steep 49% drop. That said, factors like geopolitical tensions and stubborn inflation might pose some risks for dividends in 2025.
Our Methodology
For this article, we used the Finviz stock screener to filter out European dividend stocks. We focused on picking stocks with a consistent record of paying dividends, offering dividend growth, and being financially stable to steer clear of yield traps. The list below is ranked in the ascending order of dividend yield as of December 20. We have also mentioned the number of hedge fund holders in each firm, which was sourced from Insider Monkey’s Q3 2024 database.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
A factory worker monitoring a conveyor belt of specialty chemicals being produced.
LyondellBasell Industries N.V. (NYSE:LYB) is an American multinational chemical company incorporated in the Netherlands. The company operates globally across six segments – Olefins and Polyolefins, Intermediates and Derivatives, Advanced Polymer Solutions, Refining, and Technology. It produces and markets a variety of products, including polyethylene, polypropylene, propylene oxide, and advanced polymers, while also refining high-sulfur crude oil and developing chemical process technologies. LyondellBasell Industries N.V. (NYSE:LYB) is one of the best European stocks to buy for dividend investors.
LyondellBasell Industries N.V. (NYSE:LYB) delivered a solid performance in the third quarter despite challenging market conditions, maintaining strong safety standards, and advancing its long-term strategy. The company’s total recordable incident rate of 0.13 reflects its "GoalZERO" commitment to safety, surpassing industry benchmarks. Earnings for the quarter were $1.88 per share with EBITDA of $1.2 billion, supported by strong ethylene margins and improvements in its Americas Olefins and Polyolefins segment.
LyondellBasell generated $670 million in cash from operations, converted EBITDA to cash at 77%, and maintained a robust balance sheet with $2.6 billion in cash and $7.3 billion in liquidity. Despite weaker profits, the company returned $479 million to shareholders through dividends and buybacks while investing $368 million in capital projects. Its long-term strategy aims to build a profitable Circular & Low Carbon Solutions business, targeting an additional $1 billion EBITDA annually by 2030.
The company’s recent achievements include starting construction on the MoReTec-1 advanced recycling facility in Germany, supported by a €40 million EU Innovation Fund grant. This plant, expected to begin operations in 2026, will produce high-value circular polymers with reduced carbon footprints. LyondellBasell Industries N.V. (NYSE:LYB) remains on track to close its refinery by early 2025, transitioning from low-margin businesses to sustainable solutions.
As per Insider Monkey’s third-quarter hedge fund data, LYB was owned by 38 funds, compared to 41 funds in the earlier quarter. Cliff Asness’ AQR Capital Management is the largest stakeholder of the company, with 864,370 shares worth nearly $83 million.
Overall LYB ranks 1st on our list of the best European dividend stocks to buy. While we acknowledge the potential of LYB as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LYB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
