Seeking Shelter in Dividends: Three European Stocks Offering Yields Up to 13.6%
European equities faced headwinds this week as the STOXX Europe 600 Index dipped nearly 1%, reflecting simmering trade tensions and geopolitical unease. In such uncertain climates, the search for reliable income intensifies, drawing many investors toward dividend-paying stocks. While high yields can be alluring, they often come with a story of their own—sometimes one of robust financial health, other times a signal of underlying challenges.
Here, we spotlight three European companies currently offering substantial dividend yields, sourced from a broader screening of 191 top dividend stocks in the region. Each presents a distinct profile for income-focused portfolios.
Groupe CRIT SA (ENXTPA:CEN)
Simply Wall St Dividend Rating: ★★★★☆☆
The French temporary staffing and airport services group, with a market capitalisation of €666 million, currently offers a headline dividend yield of 9.5%. This places it firmly among the top quartile of dividend payers in France. The company's dividends are supported by cash flows, with a manageable cash payout ratio of 58%. However, caution is warranted: the earnings payout ratio sits at a high 96.9%, and its dividend history has been marked by volatility over the past decade. The company recently completed a share buyback program in December 2023.
Equinor ASA (OB:EQNR)
Simply Wall St Dividend Rating: ★★★★☆☆
The Norwegian energy giant, valued at NOK 642 billion, provides a yield of 5.4%. While lower than the country's highest payers, its dividends appear sustainable for now, with earnings and cash flow payout ratios of 68.5% and 51.6%, respectively. Equinor's payout history has been uneven, but recent strategic moves—including new discoveries in the North Sea and a reshuffle in executive leadership focused on energy transition—could shape its future capacity to reward shareholders.
Wallenius Wilhelmsen ASA (OB:WAWI)
Simply Wall St Dividend Rating: ★★★★★☆
This global shipping and logistics leader, with a market cap of NOK 46 billion, stands out with a remarkable yield of 13.6%. Its dividends are well-covered by both earnings (payout ratio 53.6%) and cash flows (41.2%). Despite a past of volatile payments, the company's recent securing of long-term contracts worth approximately $764 million may provide a foundation for more consistent returns. Analysts, however, forecast a significant decline in earnings over the coming three years, a key risk for income sustainability.
Analyst & Investor Perspectives:
"In this market, a yield north of 5% demands scrutiny," notes Michael Thorne, a portfolio manager at Oslo-based Fjord Capital. "Equinor offers relative stability in the energy sector, while Wallenius Wilhelmsen's yield is spectacular but comes with clear cyclical risks tied to global trade volumes."
Sarah Chen, a freelance financial journalist, adds: "Groupe CRIT is a classic case of a high yield masking a high payout ratio. It's an income stream, but not necessarily a sign of financial strength. Investors should prioritize coverage ratios over headline yield percentages."
Offering a more pointed view, David K. Miller, a veteran investor and frequent market commentator, stated: "A 13.6% yield isn't a gift; it's the market pricing in substantial risk. With Wallenius, you're betting heavily on the global supply chain's health. That's a brave bet right now. These ultra-high yields often end up being value traps for the unwary."
This analysis is based on historical data and analyst forecasts using an unbiased methodology. It is not intended as financial advice nor a recommendation to buy or sell any security, and does not consider individual objectives or financial circumstances. Our focus is long-term, fundamental analysis. Note that our commentary may not incorporate the latest company-specific announcements. Simply Wall St holds no position in the mentioned stocks.
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