Three European Dividend Champions with Extraordinary Dividend Growth
Dividend increase of at least 1000% over the past decade
In this post we will highlight three European dividend champions that have increased their dividends by at least 1000% over the last decade. These are relatively unknown, smaller publicly traded companies that have also performed exceptionally well in terms of stock price. The good thing is that our 3 European Stocks all have rock solid balance sheets with a net cash position expected at the end of 2024. This combined with superstrong dividend growth makes our three picks (that we will add to our Focus Stocks Watchlist) very rare.
As we all know, when dividends rise, stock prices typically follow suit, simply because otherwise the dividend yield would become unsustainably high.
First, it's important to note that there are very few true Dividend Aristocrats in Europe, in contrast to the United States, where 134 stocks have increased their dividends for at least 25 consecutive years. In Europe, this number is much smaller, with an estimated 20 companies having raised their dividends each year for at least 25 years.
An estimated 20 stock from Europe have raised their dividend for more than 25 consecutive years versus 134 in The United States
The differences between Europe and the U.S. in terms of dividend policy, share buybacks, and dividend history are quite significant. In the U.S., a strong and reliable track record is paramount, while in Europe, dividends are more easily cut, even at the expense of a solid dividend history.
A good example here is LVMH, the French luxury company that reduced its dividend by 20% during the pandemic, ending a decade-long streak of increases and, more importantly, over 30 years without a dividend cut. Another example is cosmetics giant L’Oréal, one of the few true Aristocrats in Europe, which did not raise its dividend for fiscal year 2019, ending a streak of over 30 years of consecutive increases.
In the United States, the above examples would be unthinkable. Dividends are only cut when absolutely necessary—when a company runs out of cash or its revenues take a sudden hit. We saw this with companies like TJX and Ross Stores, two off-price retailers that consistently increased their dividends, but had to cut them when their stores were closed during the pandemic. Similarly, hotels and leisure companies faced the same fate.
Returning to Europe, there are very few true Dividend Aristocrats. Only 20 stocks have raised their dividends for at least 25 consecutive years, and they tend to be large, stable companies that do not stand out for dividend growth. Think of Nestlé, Roche, Novartis, and Sanofi. Like their dividend growth, these companies’ stock performances have lagged for years.
That’s why, in this video, I focus on three European stocks that stand out for their remarkable dividend growth. In fact, the three companies below have increased their dividends by at least 1000% over the past decade.
This is extraordinary. In the U.S., only 15 stocks have increased their dividends by at least 1000% in the last decade.
Dividend growth Broadcom in the last 10 years: +1400%
One of them is Dividend Hero Broadcom (ticker AVGO), the semiconductor and software company that has only recently caught the attention of dividend growth investors, even though its dividend has seen significant increases for over 10 years.
Few companies have outperformed Broadcom in terms of dividend growth over the past decade in the U.S.; we will cover these in more detail in future posts.
In Europe, there are 16 stocks that have increased their dividends by at least 1000% since the end of 2013. Often, these companies do not raise their dividends every year, but alternate between small reductions and large increases. Overall, this results in substantial dividend growth over the past decade. Here, we look at three top stocks that have seen at least 1000% dividend growth in the last 10 years. Unsurprisingly, these stocks have also performed excellently in terms of share price during this period.
SIGNIFICANT DIVIDEND INCREASES OVER THE LAST TEN YEARS
BE Semiconductor (Netherlands) +1200%
Trigano (France) +1070%
Moncler (Italy) +1050%
BE Semiconductor Industries (BESI, The Netherlands)
Besi is a Dutch company that designs, manufactures, and sells semiconductor assembly equipment for chip manufacturers. Their equipment is essential for assembling chips used in industries like smartphones, automotive, and computing.
Dividend Growth: Over the last decade, Besi has increased its dividend by 1200%, from €0.17 in 2013 to €2.15 in 2023. While dividends for 2021 and 2022 were even higher, this fluctuation is tied to the company’s policy of adjusting payouts based on annual profits.
Despite a lower dividend due to the semiconductor downturn in 2023, Besi is well-positioned to raise it again in the coming years. The stock has risen over 2000% since 2013, illustrating the close relationship between dividend growth and stock performance.
Valuation & Key Fundamental Stats
BESI has an estimated p/e of 47 for FY 2024, expected to drop to 27.5 in 2025. The ROIC for BESI was 54.7% in 2023 with a 36.9% EBIT-margin. Analysts expect a 11.7% revenue growth for BESI in 2024 to €646.7 million. The company has a rock solid balance sheet with an expected positive net cash position at the end of this year.
Trigano (France)
Trigano is a French company that produces motorhomes, caravans, and camping equipment, benefiting from Europe's growing interest in outdoor leisure. Trigano was founded in 1935 as a supplier of camping gear and expanded into caravans in the 1970s. By the 1990s, the company had diversified into motorhomes, which became its core business. Over the years, Trigano has grown significantly through strategic acquisitions of smaller European leisure vehicle manufacturers, becoming a leading player in the European motorhome market.
TRIGANO DIVIDEND PER SHARE
2023: €3.50
2022: €3.50
2021: €3.20
2020: €2.20
2019: €2.00
Dividend Growth: Trigano's dividend has soared by 1050% over the past decade. The company pays biannual dividends, with the latest totaling €3.50 per year. Trigano’s dividend yield is currently a high 3.9%, with the stock price at €120.
Valuation & Key Fundamental Stats
Trigano has an estimated p/e of just 6 for FY 2024 with a ROIC of 24.4% in 2023 together with a steady 12% EBIT-margin. Analysts expect the company to report a record revenue of €3.9 billion for FY 2024 that ended this August. Trigano also has a rock solid balance sheet a net cash position of €330 million at the end of 2023, expected to increase further the next couple of years. This almost guarantees further dividend hikes.
Moncler (Italy)
Moncler, the Italian luxury fashion brand known for its premium outerwear, particularly down jackets, has transformed itself into a global fashion powerhouse.
Dividend Growth: Moncler has grown its dividend by over 1050% in the last 10 years, from €0.10 in 2013 to €1.15 in 2023. With an average annual dividend growth rate of 27.7%, Moncler stands out in the luxury sector for its impressive track record.
Valuation & Key Fundamental Stats
Moncler also has a debt free balance sheet with an estimated €800 million in net cash predicted for FY 2024. The company has an estimated p/e of 23.7 with a ROIC of 22% in 2023 combined with a steady EBIT-margin of almost 30%.
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.