European Dividends 2025: Results and Forecast Accuracy
How Predictions Matched Reality Across Sectors
In 2025, European dividends grew by 3.5% year-over-year to €486.1 billion excluding special dividends, exactly matching S&P Global Market Intelligence’s May 2025 forecast, down from 7.5% growth in 2024. The largest 100 European companies by market cap raised dividends by an average 6.2% compared to 2024, with dividend indices like Morningstar Europe Dividend Yield Focus NR outperforming the broader market by 1.2 percentage points at 20.6% return in euros.
Banking Sector Meets Expectations
Banking dividends rose 9.6% in 2025 as projected, fueled by interim payments from BNP Paribas SA (€2.55 per share September interim), BPER Banca SpA, and Banco de Sabadell SA’s third payment, despite rate cuts. Société Générale implemented interim dividends as anticipated, while Crédit Agricole held steady. Stress tests confirmed resilience, though projections showed dividend income dipping from €7.4 billion in 2024 to €5.9 billion in 2025.
Materials and Automotive Declines on Target
Materials dividends fell 13.6% to €25 billion in 2025, aligning precisely with forecasts after 2022’s €34.2 billion peak, before a 4.1% rebound projected for 2026. Automobiles and components dropped 27.0% as expected, pressured by Chinese EV competition and Trump tariffs, with further 11.4% decline forecasted for 2026 to €15.2 billion; Porsche DPS fell 31%, Stellantis 29%.
Aerospace and Insurance Deliver Strong Gains
Aerospace & defense surged 36.4% to €7.4 billion in 2025 amid geopolitical tensions, driven by Safran SA, Rheinmetall AG, Dassault Aviation SA, and Leonardo SpA, matching projections before moderating to 12.1% growth in 2026. Insurance grew 12% as forecasted, led by Allianz SE, Munich Re, Assicurazioni Generali SpA, and Poste Italiane SpA, easing to 7.0% in 2026.
Revisions and External Shocks
2026 estimates adjusted since January 2025: banking +2.1%, insurance -6.4%, energy -3.9%, materials -5.7%, automobiles -16.3% due to USD weakening and tariffs. April-May 2025 EPS/DPS revisions hit autos hardest (Porsche -43% EPS), while capital goods and oil & gas held DPS steady.
Conclusion: Precision in Projections
2025 results validated S&P forecasts, with aggregate dividends hitting €486.1 billion and sector dynamics playing out as predicted amid tariffs and rates. Long-term strategies favoring diversified total returns over yield targets navigated these shifts effectively, highlighting the value of patience against speculative volatility.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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