Why European dividend payers deserve a second look

For most of the past three years, euro cash deposits and short-dated government bonds offered income investors a respectable return for no equity risk. That arithmetic is changing as the ECB eases.

The forward dividend yield on the Stoxx Europe 600 is close to 3.4%, roughly one percentage point above the US equivalent. More importantly, dividend cover is healthy: aggregate payout ratios remain below their long-term average.