Promising European stocks with good dividends

Even a novice investor knows that the most popular stocks today are securities of American companies.

But any investment portfolio requires diversification, so it is not advisable to form it only from US stocks.

Therefore, European stocks should also be a component of the portfolio; this step will reduce exchange rate risks.

In this case, the size of dividends is an important indicator; for many investors, this criterion is decisive when making a choice.

At one time, I also bought securities of two European companies, and I want to share this choice.

European dividend stocks

It just so happens that both acquired companies are large financial institutions and, according to experts, are excellent for long-term investment.  

Svenska Handelsbanken AB A (SHBa) is one of Scandinavia's most conservative banks, with a 150-year history. Its classic model includes a focus on retail and corporate clients, low costs, and prudent risk management.

Dividends . Over the past year, a total of 15.00 SEK was paid out per share: 7.50 regular + 7.50 special dividend (ex-div 27.03.2025).

At the current price of 122 SEK, this is approximately 12.3% per annum (15 / 122 × 100%) . Of this, the "core" is approximately 6.1% (7.5 / 122 × 100%).

The bank has strong capital, disciplined spending, and a tradition of distributing excess capital through special dividends. This makes its earnings more lucrative even without a sharp rise in stock prices.

Price outlook. As interest rates ease in the EU and Sweden, credit risks remain low and the economy gradually recovers, supporting profits. Over the next 12-24 months, I expect moderate price growth while maintaining high total yields (dividends and possible special payments).

Nordea Bank Abp (NDAFI) is the largest banking group in Northern Europe. Its scale ensures sustainable profitability, income diversification, and the ability to regularly return capital to shareholders.

Dividends. The latest payment is €0.94 per share (spring 2025). At a price of approximately €14.00, this yields approximately 6.7% per annum (0.94 / 14 × 100%) . When the bank has excess capital, it generously distributes dividends and sometimes buys back its shares.

Stable profitability, a predictable payout policy and buybacks provide a good foundation for an investment portfolio.

Price outlook. There's less of a rollercoaster here: the growth drivers are efficiency, cost control, and buybacks. With a neutral Northern EU economy and soft rates, Nordea has the opportunity to gradually rewrite its maximums.

If you're putting together a "European dividend corner" portfolio, Svenska Handelsbanken A is a more "classic" conservative choice with the possibility of special dividends (a double plus for yield), while Nordea is a bet on scale and stable dividends + buyback.

If you decide to buy shares of both companies in a 50/50 ratio, this will allow you to get about 9.5%, which is quite a good indicator.

It's also important to remember that the accounts are held in different currencies (SEK at Handelsbanken, EUR at Nordea), meaning the portfolio also has a currency factor at play—which helps reduce exchange rate risks.