We recently published a list of 10 Best Annual Dividend Stocks To Buy Now. In this article, we are going to take a look at where BASF SE (XETRA:BAS.DE) stands against other best annual dividend stocks to buy now.

In 2025, dividends in MSCI Europe are expected to reach a record high. According to Allianz Global Investors, these firms are likely to increase dividend payouts by 4% year-over-year to €459 billion, up from €440 billion in 2024. In 2026, MSCI Europe dividends could catapult even higher to €496 billion. In Germany alone, payouts are projected to rise from €57 billion in 2024 to €63 billion in 2025, and possibly hit €70 billion in 2026. Allianz Global expects the Tech and Healthcare sectors to offer the highest dividend increases in 2025, while the Energy sector could likely create some weakness. The Financials sector will remain the biggest dividend contributor in Europe. Dividend yields are staying ahead of long-term German government bond yields as well, with the MSCI Europe dividend yield expected to be 3.5% this year.

Over the last 40 years, about 39% of MSCI Europe’s total annualized return resulted from dividends. Comparatively, dividend payouts made up 22% of total returns in MSCI North America and just over 41% in MSCI Pacific.

Jenny Harrington, CNBC Halftime Report’s go-to expert on dividends, observed that the broader market’s dividends have grown about 5.7% in the last 50-60 years, which means that dividend income is outpacing inflation. She also noted that dividends are a tax-advantaged income stream, which is a huge plus. Harrington also commented that dividend investors are more likely to hold their portfolios rather than selling in a panic when markets go down. They are reluctant to give up their income streams and risk wasting years of effort, which helps keep dividend portfolios steady and resilient, even during market selloffs.

Harrington also told investors that some companies may not have strong growth potential but generate high free cash flow, allowing them to pay dividends. However, those seeking high-growth stocks should carefully balance their portfolios. Harrington advised investors to explore opportunities beyond the broader market, as the index is heavily dominated by its top 10 stocks. She suggested that looking at other companies, including dividend stocks, could offer better value and growth potential. Given this, we will now take a look at some of the best annual dividend stocks.

Our Methodology 

For this article, we manually researched annual reports and company websites to see which stocks pay dividends annually. We focused on picking stocks with a consistent record of paying dividends, offering dividend growth, and being financially stable to steer clear of yield traps. The list below is ranked in the ascending order of dividend yield as of February 6.

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BASF SE (XETRA:BAS.DE)

Dividend Yield as of February 6: 4.99%

Number of Hedge Fund Holders: N/A

BASF SE (XETRA:BAS.DE) is a German global chemical company that operates across six key segments – Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. BASF produces chemicals, advanced materials, additives, coatings, and battery materials for different industries. It also supplies ingredients for food, personal care, and pharmaceuticals, along with agricultural solutions like seeds, pesticides, and digital farming tools. It is one of the best dividend stocks to consider for an investment portfolio. BASF SE (XETRA:BAS.DE) stock has climbed 11.5% year-to-date as of February 7.

In September 2024, BASF SE (XETRA:BAS.DE) updated its financial targets for 2025-2028 and updated its dividend policy and corporate strategy. The company aims to distribute at least €12 billion to shareholders through dividends and share buybacks. From 2025-2028, dividends will total €8 billion or €2.25 per share annually, with €4 billion in share buybacks starting by 2027 at the latest. Additionally, a divestment process for its decorative paints business in Brazil is underway, and BASF expects €2 billion in cash inflows in 2024 from its exit from the oil and gas business.

BASF SE (XETRA:BAS.DE)’s 2024 financial results were a bit mixed. BASF’s 2024 sales are expected to be €65.3 billion, slightly lower than €68.9 billion in 2023, due to declining sales prices despite a slight volume increase. Cash flow from operations is forecasted at €6.9 billion, down from €8.1 billion. Free cash flow is supposed to clock in at €0.7 billion, outperforming analyst expectations but much lower than €2.7 billion in 2023.

Overall, BAS.DE ranks 3rd on our list of best annual dividend stocks to buy now. Overall, BAS.DE ranks first on our list of the best annual dividend stocks. While we acknowledge the potential of BAS.DE to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MBG.DE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.