By Al Root

For U.S. dividend seekers, it might be time to take a grand tour of Europe.

While Stellantis shocked the investment world this past week by eliminating its dividend, Americans shouldn't let it damage their opinion of European dividend payers. There are safe, better-than-U.S. yields -- and growth -- available if you know where to look.

Dividends are a little different across the pond. European companies tend to prioritize flexibility and employ payout ratios of net income or cash flow. It leads to variable payments. Stellantis paid an annual $1.65 dividend in 2024, then dropped it to 77 cents in 2025, before going to zilch for 2026. American companies don't do that. U.S. income investors value stability and consistent dividend growth above all else.

There are, however, a number of European companies with attractive yields that behave like Americans, starting with the European dividend aristocrats. The bar is a little lower in Europe -- where U.S. companies have to increase their payouts for 25 years to qualify, it's only 10 years in Europe. Given the regional differences, that makes sense. The 40-highest yielding European aristocrats -- they include drugmaker Sanofi, shipper Deutsche Post, and chemical distributor Brenntag -- yield nearly 4%, versus about 2.3% for the top 70 U.S. aristocrats.

The higher yield doesn't come at the expense of safety. The 40 highest-yielding European aristocrats have paid out roughly 40% of their net income generated over the past 12 months as dividends. That's below the Americans, who have paid out closer to 60%.

Accessing the European aristocrats in America might be a little tricky. The only exchange-traded fund that tracks the group, the SPDR S&P Euro Dividend Aristocrats Ucits ETF, trades in a few European markets and requires a broker that offers access to European exchanges. Charles Schwab, Fidelity, and Interactive Brokers can help. Investors will have a tougher time finding international stocks and ETFs on platforms such as Robinhood for now.

There are also some tax considerations in going abroad, but nothing too burdensome. Sometimes foreign companies will withhold local taxes from dividends before sending them to a U.S. payee. "In these cases, the U.S. payee will be allowed a credit against the U.S. tax to...ensure that the payee is not taxed twice on the same income," says accounting expert Robert Willens, who notes that European dividends are otherwise taxed like U.S. payouts.

Exchange rates can affect the value of foreign dividends, though they can help or hurt depending on how currencies move. It's a risk, but Europe's superior yield should be more than enough to compensate for any added currency-induced volatility. And right now, a weak dollar is working in favor of U.S. investors.

Investors who want to take a European vacation, but in U.S.-listed funds, have a few options. The State Street SPDR S&P Global Dividend ETF holds about 100 consistent, high-yielding stocks from around the globe, including the U.S., and currently yields about 5%; the iShares International Select Dividend ETF is similar without U.S. holdings. It yields 5.1%. The Vanguard International High Dividend Yield ETF is the most diversified, holding more than 1,500 non-U.S. stocks, and yields 3.8%. All three hold European dividend aristocrats.

Investors can look at individual stocks, too. The three highest-yielding stocks in the S&P Europe 350 Dividend Aristocrats are British financial services company Legal & General Group, Norwegian bank DNB, and Finnish telecom company Elisa. Those three yield 8%, 6.2%, and 5.2%, respectively. All three require investing in overseas markets.

There are also foreign individual stocks with American listings to consider, too. Norwegian energy company Equinor yields about 5.4% and has a history of increasing its regular dividend, while drugmaker Novartis yields about 3%. ASML Holding, whose machines handle the lithography for chip makers, narrowly missed becoming a European dividend aristocrat by failing to increase payouts in 2020. Still, it's a consistent dividend payer and raiser, yielding about 0.9%.

Write to Al Root at allen.root@dowjones.com

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(END) Dow Jones Newswires

February 13, 2026 21:30 ET (02:30 GMT)

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