In 2025, European dividend stocks saw a 6.2% increase in payouts, with banks leading the way in dividend growth while the automotive sector faced cuts. The Morningstar Europe Dividend Yield Focus NR Index outperformed the regional index, returning 20.6% in euros compared to 19.4%. Financial services and utilities sectors had the highest returns.

Among the European companies that increased dividends the most in 2025 were BNP Paribas, Société Générale, NatWest Group, and Standard Chartered. However, 13 companies, including Equinor and leading German car manufacturers like Volkswagen and BMW, cut their dividends due to lower profits. BMW is engaged in a share buyback program to support its financial position.

Overall, European investors saw a positive trend in dividend payouts in 2025, with the largest companies increasing their dividends by an average of 6.2%. However, sectors like healthcare and consumer cyclicals underperformed, impacting their weight in the dividend index. Consumer staples, the most overweight sector in the dividend index, also struggled with a gain of only 6.6%.

Read more at Morningstar: Which European Stocks Paid the Best and Worst Dividends in 2025?