Global stock markets are experiencing a reprieve after recovering their losses from the impact of President Donald Trump’s tariffs at the start of April.
Amid this uncertain backdrop, Ian Mortimer, co-portfolio manager of the Guinness Global Equity Income Fund, which has a Bronze Medalist Rating, looks for stocks that provide a sustainable and growing dividend over time despite market turmoil.
“If you just look for high dividend yields you tend to go down certain routes like banks, utilities, real estate, and telcos. But what we are seeking are companies that have more resilient business models in more cyclical sectors, and companies that for whatever reason have managed to maintain high returns on capital over time,” he tells Morningstar UK.
Deutsche Boerse DB1, Schneider Electric SU, and Publicis PUB are the three examples of dividend payers that Guinness’ Mortimer backs in his fund. So, why do these companies stand out?
Deutsche Borse, Schneider Electric, and Publicis
Germany’s stock exchange operator Deutsche Borse, which has the highest weighting in the Guinness Global Equity Income Fund, is considered an overvalued stock according to Morningstar analysis. The stock is currently trading at EUR 280.80, above Morningstar’s fair value estimate for the stock of EUR 220 per share after rising 25.51% this year.
“Exchange groups are interesting opportunities in terms of the ability to pay dividends, the dividend growth, and within the financial sector they can be quite defensive when markets are very volatile,” Mortimer says.
“When expectations of rates and equity markets change you tend to get increased trading, and these companies often can do quite well. And it is this company that has done quite well for us in terms of all the market policies and tariffs we have seen through 2025,” he adds.
For Q1 2025 the German exchange posted revenue of around EUR 1.5 billion, just shy of company expectations. The company’s performance in the quarter was bolstered by increased market volatility.
Deutsche Boerse currently has a dividend yield of 1.43% and paid a dividend per share of EUR 4 in 2024, up from EUR 3.80 in 2023.
Niklas Kammer, equity analyst at Morningstar, believes that Deutsche Boerse is one of the dominant exchange groups in Europe for its range of services from derivatives, indexes, analytics, to its fund distribution platform. However, for Kammer, Deutsche Boerse, is not completely immune from a prolonged market downturn because of the largely fixed cost base of the business.
Data Centers and AI Demand
French multinational Schneider Electric, which makes up 2.34% of the fund, is another dividend payer Mortimer is bullish on. He is keen on the company because it is exposed to growing sectors like the construction of data centers.
“They are also at the forefront of efficient buildings and electrification. Our view is that the AI and cloud computing long-term secular trend remains quite strong and [Schneider] is a really good way to capture some of that growth without necessarily taking a specific bet on it.”
Mortimer also expects Schneider Electric to post double-digit earnings growth over the next few years. The stock has a “fairly modest” dividend yield of 1.2%, Mortimer says, but over the past three years it has experienced dividend growth of between 10% and 11%.
“That dividend growth is reflective of the higher earnings growth. The idea of income and growth is a good combination because we believe this company can benefit from those longer-term trends to use that to reinvest in their business but to also pay out that growing cash flow.”
Schneider Electric paid a dividend of EUR 3.90 in 2024, up from the EUR 3.50 it paid in 2023, and the EUR 3.15 it paid in 2022.
According to Matthew Donen, director of equity research at Morningstar, the company’s Q1 2025 earnings underperformed company estimates, reporting 7.4% organic revenue growth rather than 8.9% and revenue of EUR 9.3 billion. He attributes the results to typical seasonal factors.
Schneider Electric is currently trading at EUR 218.25 and is slightly under Morningstar’s fair value estimate of EUR 236. Year to date the stock is down around 10%.
France’s Publicis Leans Into Data, AI
Publicis Group, the French multinational advertising and PR company, is held at 2.4% in the Guinness Global Equity Income fund. The stock has the highest dividend yield out of the three companies at 3.76%.
It paid a dividend of EUR 3.60 in 2024 up from previous levels in 2023 at EUR 3.40 and 2022 at EUR 2.90. Mortimer recently added the stock to his portfolio due to its attractive valuation.
“What’s interesting about Publicis from an advertising perspective is that in comparison to their peers they have done well in moving quickly into data analysis and using aspects of artificial intelligence in creating more of a platform. They are helping a lot of companies [understand] where they are advertising, who they are advertising to, and getting a lot more data within that.”
Publicis is also expanding through acquisition, having already bought ad-tech firm Lotame to boost its AI strategy, and sport and culture brand agency Adopt this year.
Mortimer says the acquisitions have shielded Publicis from the impact of market downturns when advertising spend is usually cut, because it has diversified its portfolio of businesses.
Paris-listed Publicis delivered net annual revenue of EUR 14 billion in 2024, beating estimates. The company’s operating income also grew more than 25% to EUR 2.2 billion.
Eric Compton, director of technology equity research at Morningstar, views Publicis favorably among its peers because of its integrated data and media offerings.
He argues that its organic revenue growth remains “near best in class” maintaining its 4% to 5% organic growth guidance despite macroeconomic uncertainties.
Publicis is currently trading at EUR 96.50, under Morningstar’s fair value estimate of EUR 105. However, year to date the stock is down just over 7%.
