Stodgy. That's how I used to think of European stocks, what with Europe's aging population, constant labor issues, and historically anemic growth in gross domestic product. I used to prefer the higher-growth regions of Asia and South America.

But I've changed my opinion on European stocks in recent years. You may want to take a second look, too.

A breath of fresh air
A lot has changed in Europe over the past six years. The euro currency that hit the market in 2002 is near its highest level ever against the dollar and the yen. Former Soviet-bloc countries such as Lithuania, Estonia, and Latvia joined the European Union in 2004, and pro-market leaders have been elected in Germany and France.

European stocks reflect the growth and change. The Vanguard European Stock Index Fund, for instance, with top holdings in GlaxoSmithKline (NYSE: GSK) and Vodafone (NYSE: VOD), has risen by 165% since January 2003 -- thoroughly outpacing the U.S.-focused Vanguard 500 Index, which has risen by 76%.

Of the more than 83,000 investors participating in Motley Fool CAPS, the Fool's free investor-intelligence community, many have also noted the promise in Europe. Here are this month's top five European stocks, as CAPS participants have rated them:

Stock

Country

Industry

Aktieselskabet Dampskibsselskabet Torm

Denmark

Shipping

Novo Nordisk (NYSE: NVO)

Denmark

Health care

iShares S&P Europe 350 Index (NYSE: IEV)

Europe -- General

ETF

National Grid (NYSE: NGG)

U.K.

Utilities

iShares MSCI Netherlands Index

Netherlands

ETF

Source: Motley Fool CAPS.

Please bear in mind that these stocks are not formal recommendations. Instead, I offer them as jumping-off points for further research. And I'll also point out that researching five-star CAPS stocks such as these has proved to be an effective tool for investors.

It's a gas, gas, gas
London-based utility National Grid makes its way onto this month's list despite general weakness from the utilities sector thus far in 2008. For example, U.S. utilities such as Consolidated Edison (NYSE: ED) and American Electric Power (NYSE: AEP) have fallen by 11% and 8%, respectively, so far this year.

But that didn't stop National Grid from recently recommending bigger dividend payments to shareholders through 2012. National Grid's American depositary receipts currently pay a fairly decent 3.1% dividend yield ($2.43 per share), but the new dividend policy would increase payments by 15% this year and 8% per year thereafter until March 2012. That should be particularly appealing to income-minded investors who feel pinched in this low-interest-rate environment.

National Grid owns the high-voltage electricity grid in England and Wales, and it owns and operates the high-pressure gas transmission system in Britain. Note that the company owns and operates the electricity and gas systems in much of the U.K. -- in other words, it's a regulated monopoly, so those cash flows are relatively predictable. The company also delivers electricity and gas services to much of the American Northeast. In fact, National Grid derives nearly half of its annual revenues from the United States.

Over on CAPS, fully 94% of those who have rated National Grid think it will outperform the S&P 500 going forward. One of the National Grid bulls is the Fool's own TMFLucky11, who said: "This company isn't reliant on the price of oil to make money -- its transmission and distribution networks are crucial to the energy sector at any cost. Solid company, nice growth, and plenty of potential for the future."

What do you think? Will National Grid continue to make dividend investors happy, or will its heavy debt load come back to haunt it? Make your voice heard about this stock -- or any stock, for that matter -- on Motley Fool CAPS.