Dividend payments within the MSCI Europe Index are expected to reach an all-time high in 2025, according to Allianz Global Investors (AllianzGI), an investment management firm that oversees nearly €560bn globally. The firm on Tuesday 14 January 2025 that companies within the index distributed approximately €440bn in dividends in 2024, with this amount forecast to increase by 4% to €459bn in 2025.
Dividends are a key component of the total return on equity investments, and AllianzGI highlighted that the average dividend yield for MSCI Europe companies is also on the rise. This yield, defined as the ratio between the amount paid out and the current share price, increased from 3.3% at the end of 2024 to a projected 3.5% for 2025. The forecasted yield continues to outperform long-term German government bonds (bunds), underscoring the growing importance of dividends as a return source, according to AllianzGI.
Grant Cheng, dividend manager at AllianzGI, commented on the ongoing trend, noting that dividends in Europe have experienced continuous growth since the covid-19 pandemic. This growth is not only persisting but intensifying, with annual increases in payouts expected to accelerate. Sector-wise, information technology and healthcare are anticipated to see the largest increases in 2025, while the energy sector is projected to face a decline in dividends. The financial sector, though still the largest contributor to dividend distributions, is likely to experience a slowdown in growth.
Austria is set to maintain its top position in Europe’s dividend yield rankings, with a stable forecast of 6.2% for 2025, matching the figure from 2024. This highlights the strength of dividends in the region, particularly within the broader European market.
Hans-Jörg Naumer, author of the dividend study and head of capital markets analysis at AllianzGI, provided additional context by analysing the past two decades of the Stoxx Europe 600 market index. He noted that most companies have consistently increased their dividend payouts year-on-year and only a small proportion of firms reduced their distributions during exceptional years, such as 2009, following the global financial crisis, and 2020, during the covid-19 pandemic.
The full study is available .