new record in Europe in 2025

In 2025, dividend payouts for the MSCI Europe index are expected to reach a new record level. According to the calculations of Allianz Global Investors, in 2024 the dividends of companies in the European stock index MSCI Europe amounted to approx 440 billion euros. It is expected that in 2025 they will amount to around 459 billion euros: an annual growth of 4%. In 2026 they should reach a total of approximately 496 billion euros (+13% compared to 2024). In Italy, dividend distributions are expected to increase from approx 30 billion euros in 2024 to around 32 billion euros in 2025, and could reach 34 billion euros in 2026.

Dividends: new record in Europe in 2025

“The growth trend continues uninterrupted dividend distributions in Europe since the coronavirus pandemic. And this trend is intensifying: the annual increase in dividends distributed is also expected to grow,” he says Grant Cheng, Portfolio Manager Dividends at AllianzGI.” At a sector level, Information Technology and Healthcare are among the sectors for which the largest dividend increases are expected for 2025. In the energy sector, dividends paid will tend to decrease. The financial sector will remain the one that distributes the most dividends, albeit with a slowdown in the growth of distributions expected for 2025.”

The dividend yield, which represents the percentage ratio between the unit dividend distributed and the current share price, also follows the trend of increasing dividends in absolute terms. For companies in the MSCI Europe index, it stood at 3.3% at the end of 2024 and could rise to 3.5% this year. Last year the Italian companies included in the MSCI Europe showed a dividend yield of 4.9%, which is expected to rise to 5.2% in 2025. Austria leads the European ranking: the dividend yield, in 2024 equal to 6.2%, it is expected to remain at the same level in 2025.

459 billion euros expected (+4%)

Dividends contribute significantly to the total return of an equity investment, as shown by the Allianz Global Investors Dividend Study3 2025. Over the last 40 years, almost 39% of the annualized total return of equity investments with reference to the MSCI Europe index has been determined by the contribution of dividends to performance. In North America (MSCI North America) and Asia-Pacific (MSCI Pacific), dividends accounted for just under 22% and just over 41% of overall performance, respectively.

Companies also tend to pursue a policy of stable dividends, oriented towards increases in distributions.

Hans-Jörg Naumer, Global Head of Capital Markets & Thematic Research and author of the study, notes: “When analyzing the last 20 years of the even broader STOXX Europe 600 index, the study clearly shows that the vast majority of companies have shown a tendency to increase dividends annually on year. Only a significantly lower percentage of companies reduced their dividend distributions, with the exception of particular years such as 2009, the year after the outbreak of the global financial market crisis, and 2020, the year of the pandemic. In the past the total amount of dividends is also increased from year to year.”

Growth trend continues

Dividends also play an important role as source of incomeincome deriving from financial investments. “In a time when people are living longer, especially in developed countries, the public pension system is under pressure from demographic changes and there are fewer and fewer people working, labor income should be supplemented by capital income” , says Dr. Hans-Jörg Naumer.

“Thanks to themor constant growth and their significant contribution to overall stock returns, dividends can represent a valid source of generating additional income, which for example can be used for children’s education, holidays or to supplement your pension.” In addition to dividend payments, investors can potentially also benefit from earnings from increases in share prices.