The corona pandemic has caused a wave of dividend cuts in Europe and the Netherlands in recent weeks. We have listed all the Dutch shares that have reduced their dividends in recent weeks and are also looking at the best Dutch dividend stocks which are a member of the AEX-index. Some elements discussed are dividend yield, dividend history, and dividend growth.
AEX-Index and dividends
The AEX index, or Amsterdam Exchange index, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam. The index has currently 25 constitutes and is a price-index, meaning dividends are not included. Compared to the S&P 500 index, the AEX-index is somewhat of a “Mickey Mouse” index due to the limit of only 25 members and the top-3 stocks RD Shell (RDSA.AS), Unilever (UNIA.AS), and ASML (ASML.AS) account for 40% of the index. The long-term average dividend yield for the AEX-index stocks is just above 3%.
In the “Quarterly review” Euronext Amsterdam indicated that ASMI and Just Eat TakeAway will be included in the AEX index from 23 March 2020 onwards. Aalberts NV and Vopak have to give up their place.
Looking at the dividend payout frequency, unlike in the US, it is still not common to pay dividends quarterly. Four stocks still pay annual dividends, which are ASMI (ASM.AS) , IMCD (IMCD.AS), Arcelor Mittal (MT.AS), Philips. 15 members pay twice per year dividend and the two large caps Unilever and RD-Shell pay quarterly. Adyen, Just Eat/Takeaway, Prosus, and Galapagos don’t have a dividend policy.
See below the table with AEX dividend stocks, that paid TTM dividend.
Several of the AEX stocks that their dividend postponed or cut are financials. The Dutch central bank (DNB) and ECB requested the financial sector to freeze their dividend payouts. As a result, banks and insurance companies, ABN AMRO, NN Groep, ASR Netherlands, Aegon, and ING groep did put dividends on hold. Also, Real-estate company Unibail-Rodamco-Westfield did cut its dividend. Randstad also cuts dividend for the fiscal year 2019, to be paid in 2020.
Best AEX dividend Stocks
Looking beyond the recent dividend cuts, there are still some AEX companies that do have a dividend growth policy. One of the best dividend histories is achieved by Wolter Kluwer with 14 years of consecutive dividend increases and for more than 30 years, Wolters Kluwer (WKL.AS) has increased or maintained its annual dividend per share in euros.
Wolters Kluwer remains committed to a progressive dividend policy and the last dividend increase has been 20% (2019). Other interesting stocks for dividend growth investors are: Ahold Delhaize (dividend 2019:+9%), ASML (+14%), RELX (+9%) and Unilever (+6%).
RD-Shell is an important dividend stock for many Dutch investors, this Oil-stock has a good dividend track-record with respect to stable dividend policy in US-dollars and high dividend yield. However, give the current collapse of the oil prices the dividend payout is under pressure.
ASM International dividend
A recent member of the AEX-index is ASM International or ASMI (ASM.AS). This technology company is a “special one” with respect to dividends. The board is proposing an extra-ordinary dividend of €1.5 on top of the regular dividend, to be approved at the AGM 2020, and ex-dividend in May 2020. Excluding the extra-ordinary dividend, the dividend growth was already 50%.
In addition to the regular dividend, on August 10, 2018, ASMI already distributed €4.00 per common share to its shareholders. In July 2013, ASMI distributed €4.25 per ordinary share to its shareholders. This followed on the sale of 12% of the total shares in ASMPT in March 2013.
Overview dividend yield Dutch AEX stocks
The table below lists the dividend-paying stock in the AEX-index with their trailing twelve months dividend yield, PE-ratio, and 5 years dividend growth. Please notice the stocks with a dividend alert color red or yellow. Their dividend is at risk (e.g. RDSA.AS), cut or postponed and the actual future dividend yield can be lower or even zero!
Other Sources of Dividend Investment Ideas
The Dividend Aristocrats list is not the only way to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of less than 20 businesses with 50+ years of consecutive dividend increases.
- The MoneyInvestExpert Defensive Aristocrats is a performance-based top-10 selection of the Dividend Aristocrats to outperform the market on the long-term.
- Portfolio lists like the Berkshire Hathaway Portfolio or Bill Gates’stock portfolio can be a source.
- For the European focused investors there is also the list of European Dividend Aristocrats.
- Dividend Champions are not necessarily members of the S&P 500 index, have increased their dividend for 25 or more consecutive years.
- 100+ years of dividend, the list of stocks that pay over 100 year of dividend can be an list of inspiration.
Next to selecting the right dividend stocks, important principles for successful long-term investing are Disciple, Diversification, Defensive & indeed Dividend. Read more about this in our free e-book.
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