In this article, we discuss 12 Best International Dividend Stocks To Buy Now.
Dividend stocks have been grabbing investors’ attention for a while now. According to JP Morgan, over the last two decades, global dividends per share have increased at an annual rate of 5.6%, but analysts expect this to rise to 7.6% in the future, driven by historically low payout ratios. During the 2020 pandemic, many companies cut dividends, but as earnings have recovered, especially in Big Tech and AI, dividends have not kept up. With payout ratios at 25-year lows, simply returning to normal could add 2% annual growth over the next five years.
After slowing down post-COVID, global dividend growth made a surprising comeback last year, increasing 8% and adding an extra $180 billion in payouts despite ongoing economic and geopolitical challenges. According to S&P Global, this was largely driven by record dividend initiations in US tech, European banks, Japan’s auto industry, and solid growth from China. Even oil and gas companies held strong despite market volatility. Looking ahead, experts predict global dividends will hold steady at $2.3 trillion in 2025.
Regionally, developed Asia, which includes Japan, Hong Kong, Australia, South Korea, and Singapore, is looking at a 3% rise in dividends this year. Europe, on the other hand, is expected to see a 3.4% decline. In emerging markets, the trends are mixed. Asia, led by China, India, and Taiwan, is on track for a 5% increase, while dividends in the Middle East and Africa could drop by 20%, mainly because Saudi Aramco’s special dividend program ended. Latin America is also expected to see a small dip of around 4%.
When it comes to sectors, banks and energy companies remain the biggest dividend payers. Banks are expected to distribute around $380 billion globally, but after four years of rapid 20% growth, they are now down to just 2%. Banks are playing it safe, waiting to see how interest rates move. Given this, we will take a look at some of the best international dividend stocks.
Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/
Our Methodology
For this article, we used the BlackRock International Dividend ETF to filter out dividend stocks listed on US exchanges but headquartered internationally. We focused on picking stocks that were most popular among hedge funds. The list below is ranked in the ascending order of Q3 2024 hedge fund sentiment, and dividend yields are mentioned as of February 11.
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12. UBS Group AG (NYSE:UBS)
Dividend Yield as of February 11: 1.00%
Number of Hedge Fund Holders: 25
Headquartered in Zurich, Switzerland, UBS Group AG (NYSE:UBS) is a global financial services company that caters to private, institutional, and corporate clients. It operates through five divisions – Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy.
UBS Group AG (NYSE:UBS) reported strong Q4 and full-year financial performance, with a net profit of $5.1 billion and an 8.7% return on CET1 capital in 2024, reflecting successful integration efforts and global business growth. The CET1 capital ratio stood at 14.3%, ensuring a strong capital position. The company also experienced revenue growth in global wealth management and investment banking. For Q4 2024, profit before tax tripled to $1.8 billion, total revenues rose 6% to $11 billion, and EPS reached $0.23.
To redistribute capital gains amongst shareholders, UBS Group AG (NYSE:UBS) plans to propose a $0.90 per share dividend, which is up 29% year-over-year. The dividend will be distributed on April 17, to shareholders on record as of April 16. The bank also proposed a share repurchase plan of up to $3 billion this year.
According to Insider Monkey’s third-quarter database, 25 hedge funds were bullish on UBS Group AG (NYSE:UBS), compared to 33 funds in the prior quarter. Pzena Investment Management is a prominent stakeholder in the company, with 30.8 million shares worth nearly $802.7 million.
11. Diageo plc (NYSE:DEO)
Dividend Yield as of February 11: 3.54%
Number of Hedge Fund Holders: 26
Diageo plc (NYSE:DEO) is a London-based global alcoholic beverage company that produces, markets, and sells spirits, beer, and non-alcoholic drinks. The company sells whiskies, vodka, gin, rum, tequila, liqueurs, and flavored malt beverages.
Diageo North America is investing $415 million in a new manufacturing and warehousing facility in Montgomery, Alabama, to solidify its supply network. Built on 360,000 square feet, the facility will increase production capacity for the company’s top beverage brands and support its North American and export operations. The project is expected to be fully operational by late 2025.
Diageo plc (NYSE:DEO)’s free cash flow rose by $125 million to $1.7 billion in the most latest quarter, mainly due to better working capital management. The company announced a $0.405 per share dividend for the half, keeping it flat from last year as a cautious move in the current market. Diageo’s sales for the six months ending in December 2024 dropped by 0.6% to $10.9 billion. A dip in sales, paired with uncertain trade conditions, led the company to withdraw its medium-term organic sales growth target of 5 to 7%.
Among the hedge funds tracked by Insider Monkey in Q3 2024, 26 funds were long Diageo plc (NYSE:DEO), compared to 31 funds in the prior quarter. William B. Gray’s Orbis Investment Management is the leading stakeholder of the company, with nearly 2 million shares worth $278 million.
10. Sanofi (NASDAQ:SNY)
Dividend Yield as of February 11: 3.91%
Number of Hedge Fund Holders: 32
Sanofi (NASDAQ:SNY) is a global healthcare company headquartered in Paris, France, specializing in medical treatments for neurology, immunology, oncology, rare diseases, diabetes, and cardiovascular conditions, along with vaccines for influenza, meningitis, and travel-related diseases. It is one of the best dividend stocks to buy now.
For FY 2024, Sanofi (NASDAQ:SNY) announced total sales of €41.1 billion, indicating an 11.3% increase at constant exchange rates (CER). Dupixent generated over €13 billion and Beyfortus reached blockbuster status with €1.7 billion in its first full year. SNY’s EPS came in at €7.12, growing 4.1% at CER, outperforming guidance despite a 1.8% decline in reported terms. The company also proposed a €3.92 dividend for 2024, marking the 30th consecutive annual increase.
In 2025, Sanofi (NASDAQ:SNY) expects sales to grow by a mid-to-high single-digit percentage and business earnings to increase by around 10% before share buybacks. The company also plans to buy back €5 billion worth of shares, mainly through block trades and open market purchases, with the goal of canceling them.
Ken Fisher’s Fisher Asset Management was the largest position holder in the company among funds tracked by Insider Monkey, with a stake worth roughly $770 million. Overall, 32 hedge funds held shares of Sanofi (NASDAQ:SNY) at the end of the third quarter of 2024.
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