With the improving economic outlook, more observers expect European companies to produce healthier returns and pass on the growth to shareholders through higher dividends.
“We’re pretty optimistic on the outlook for corporate earnings and expect that to seep through into dividend payments,” Robert Parkes, director of equity strategy at HSBC, said in the article. “It’s primarily to do with the improving economic backdrop we’re seeing in Europe. We also don’t believe that payout ratios are particularly high at this point either, so there is a potential for dividend payments to rise further.”
For more information on Europe, visit our Europe category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of SPY and HEDJ.