EME Macro/Strategy: dividends in EMEA – if growth is in doubt, opt for payout

In the current macroeconomic environment, characterised by declining EUR interest rates, slower Eurozone growth, and significant expected policy rate cuts across the Eurozone, we have decided to flag the high dividend stocks across our coverage universe. With the yields on the 10-year US Treasury now higher than the S&P 500 earnings yield, equity risk premiums have narrowed substantially in the US. EME companies are increasingly attractive, as they transition to a phase of excess capital distribution, supported by converging macro and corporate governance standards with developed markets. We have focused on dividend picks that manifest strong balance sheets and earnings resilience, proven by historical track records. We have also applied a liquidity filter on our top dividend picks for the region. Our analysis identifies opportunities across the EME region, beginning with a global macro overview and moving to specific stocks and sectors. Poland, Greece and Kazakhstan emerge as promising markets, combining strong macro fundamentals with reliable dividend profiles. Overall, we identify over 30 interesting high-dividend yielders (HDY) in our region, and we highlight our top seven picks, with dividend yields in high single-digit/double-digit territory.