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Rio Tinto ore mining in Australia:
The mining company currently offers an exceptionally high dividend yield
Photo: TIM WIMBORNE / REUTERS
Rolf Buch
(56) knows where many shareholders have their weak points. The boss of the major landlord Vonovia is currently making the third attempt to take over competitor Deutsche Wohnen. In order to finally persuade the shareholders of Deutsche Wohnen to surrender their papers, Buch last made an undisguised threat: "It is also important for the small shareholders to know," said the Vonovia boss, "that Vonovia, as the majority shareholder in Deutsche Wohnen, is in favor of it will set in that Deutsche Wohnen no longer pays dividends. " Anyone who does not offer the share, Buch continues, is sitting on a piece of paper that "will not pay out a dividend for years".
It is quite possible that the Vonovia boss will hit a nerve with investors in Deutsche Wohnen.
In addition to possible price gains, the dividend is one of the main reasons for many investors to buy shares.
This is all the more true in times of the lowest interest rates at banks and savings banks.
In many corporations, shareholders have been able to rely on regular payouts for years.
There was a damper due to the Corona crisis.
Numerous companies had cut their dividend payments or even completely suspended them in view of the associated economic weakness.
But from an investor's point of view, the time of privation now seems to be over.
The economy is making a comeback around the world, companies are making decent profits again - and dividend payments are rising.
According to the investment company Janus Henderson Investors, the global dividend recovery really started in the second quarter of 2021. Around the globe, dividends rose 26.3 percent year-over-year to a total of $ 471.7 billion, the company said. Adjusted for special dividends, currency effects and similar influences, growth was still 11.2 percent. This means that the payouts are still slightly below the pre-pandemic level - but Janus Henderson Investors assumes that they will return to the old highs in the next twelve months. The values are above expectations, writes the investment company.
More than eight out of ten companies around the world recently increased their dividends or kept them constant, says Janus Henderson. This also applies to German companies. "Seven out of ten German companies in our index increased their dividends or kept them constant," says Daniela Brogt, Head of Sales Germany & Austria at Janus Henderson Investors. "For example, Allianz, Deutsche Telekom and BASF are among the top 20 dividend payers. However, increases were almost completely offset by cuts at BMW and Bayer."
The US bank JP Morgan is also observing the comeback of dividends, much more so in Europe than in the USA, for example.
"Dividend projections show a strong recovery, especially in Europe," wrote JP Morgan analyst Mislav Matejka most recently in a study.
Compared to the period at the beginning of the year, there were signs of significant increases in dividend payments, especially on the UK stock market, but also in the euro zone and Japan.
In the US, the projections showed little change.
Tips for dividend hunters
The search for the right stocks
If you want the most
reliable dividend payments
possible on the stock market
, you have to be on your guard.
Because companies that pay dividends are by no means just rock solid profit machines.
All corporations that regularly and reliably generate profits do not pass part of it on to their shareholders, nor do all stock corporations that actually grant a profit distribution automatically count among the papers that security-oriented investors like to have in their portfolios.
So how do you find the right papers?
Here are some pointers:
Yield area suggests absolute dividends expand
The absolute amount of a dividend payment per share is relatively worthless as information.
A comparable key figure can only be calculated in relation to the share price, namely the
dividend yield
.
The following applies: On average, the Dax companies currently come up with a dividend yield of around 3 percent.
But if you select the right individual values, you can also achieve returns of 5 percent or more.
AreaAssess the companyexpand
The dividend yield alone does not provide sufficient information about whether a paper is actually worth the investment.
After all, in addition to the absolute amount of the distribution, the share price is also included in the calculation of the key figure - the return can therefore increase because the price falls.
It is therefore always crucial to take a look at the
company behind the share
: What is the economic situation, the market position, the prospects?
Bet on dividend stars areaexpand
The stars of the dividend scene are also known in the jargon as
dividend
aristocrats.
These groups such as the world-famous soda manufacturer Coca-Cola, the pharmaceutical giant Roche or the consumer goods giant Procter & Gamble have decades of uninterrupted and, as a rule, increasing profit distributions.
The dividend yields do not have to be high - they have to be reliable.
Note the payout quota.expand
Profit distributions should only be made if a company is also making a profit - otherwise, the transfers are draining the substance. In addition, hardly all profits should be paid out to the shareholders, after all, every company needs reserves for bad times as well as investments in order to remain competitive and to be able to continue to grow. The measure by which the relative amount of the distribution compared is specified by the company's profit, is called
payout ratio
. It should not be too high in individual cases. On average for many years, all Dax companies together have barely exceeded the 50 percent payout ratio.
JP Morgan also expects - supported by rising corporate profits - a further significant increase in dividend payments over the next twelve months, although according to Matejka the projections will still be below the interim highs reached in 2019.
Particularly attractive industries for dividend hunters are currently mining companies as well as the transport, automotive and banking sectors.
On the other hand, however, it is foreseeable that companies from all important defensive sectors are likely to pay less dividends this year than initially thought.
This applies to the medical industry, the manufacturers of household and personal care products, the producers of food and beverages, the utilities as well as the telecommunications providers and in particular to the real estate companies.
Vonovia boss Buch is therefore right on trend with his threat. Investors looking for attractive dividends may want to look outside the real estate industry. An investigation by DZ Bank provides assistance, in which, in addition to the amount of dividends and the dividend yield, other important factors were also taken into account, such as the sustainability of the payments and various fundamental valuation indicators of the companies.
Result: DZ Bank also names the insurer Allianz and the chemical company BASF as particularly attractive dividend payers on the German stock market. Both currently offer a dividend yield in the range of 5 percent and are therefore pretty far ahead on the local stock market. Also attractive, according to DZ Bank: The papers of the financial services provider DIC Asset, the chemical company Bayer and the utility Uniper. The DZ Bank has also identified the telecommunications provider Freenet, the automotive supplier Schaeffler and the car manufacturers Daimler and BMW as good dividend payers with additional price potential. Mind you: At Freenet and Schaeffler, the dividend yield is currently around 7 percent or even higher. However, an investment in such small caps requires a greater willingness to take risks, as DZ Bank also admits.
In addition, there are other reliable dividend payers in Europe beyond Germany's borders.
According to DZ Bank, the British mining company Rio Tinto should be mentioned, for example, whose dividend yield is currently in the double-digit range.
In addition, the tobacco giant British American Tobacco and the French oil company TotalEnergies are at the top of the ranking of so-called dividend aristocrats, which the bank leads.
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