Investors have had little choice but to buy stocks as the central-bank action helps force down returns from other assets, said Didier Duret, who helps manage 146 billion euros as chief investment officer at ABN Amro Private Banking in Amsterdam. The 4.3 percent estimated dividend yield of Euro Stoxx 50 members compares with the 1.5 percent yield on 10-year German bunds. Euro-denominated, investment-grade corporate bonds yield 2.06 percent, according to Bank of America Merrill Lynch index data.

“Dividends of quality companies are offering better returns than even high-yielding corporate bonds,” Duret said. “Investors will have to turn to equities to capture those kind of returns.”

Gap Narrows

The gap between returns from dividends and bond coupons is narrowing as industries such as telecommunications and utilities reduce payouts to conserve cash. The spread between dividend yields on the Euro Stoxx 50 and 10-year bund yields narrowed to 2.77 percentage points on Jan. 11 from as much as 4.67 on June 1, Bloomberg data show.

European telecommunication operators will pay 6.6 percent of their share prices as dividends in 2013, down from 8.5 percent in 2011, Bloomberg estimates show. KPN, the Dutch phone company partly owned by Carlos Slim’s America Movil SAB, plunged the most in 11 years on Dec. 17 after the Hague-based company said it wouldn’t pay a final dividend in 2012 and this year’s payout will fall to 3 euro cents a share.

France Telecom

France Telecom was the worst performer in France’s CAC 40 Index last year, with a 31 percent drop. The Paris-based former phone monopoly will declare a final dividend of 22 euro cents in February, down from 80 cents a year earlier, as it seeks to control debt amid growing competition, according to Bloomberg forecasts that account for earnings and options prices.

Utilities including Enel, Italy’s biggest, are also lowering payouts to shareholders, with companies in the Stoxx Europe 600 Utilities Index forecast to pay an average yield of 6.3 percent in 2013 compared with 6.7 percent last year and 7.8 percent in 2011.

“Telecommunication and utility companies, which used to offer sustainable dividend yields, massively underperformed” last year, said Robert Quinn, European equity strategist at Standard & Poor’s Capital IQ in London. “Dividends from banks, a rich source before the financial crisis, have also practically disappeared.”

Telecommunication companies in the benchmark Stoxx Europe 600 Index posted the worst performance among 19 industry groups last year, sliding 11 percent, data compiled by Bloomberg show. A measure of utilities had the third-largest losses, with a 0.7 percent retreat.