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BMW and Mercedes in the race:
The two car manufacturers are among the most important dividend payers in Germany and offer a good dividend yield
Photo: Hz/ dpa
Dividend hunting pays off again this season.
After the Corona valley, the profit distributions of companies on the German stock market are rising significantly.
This is shown by a current study by DZ Bank, which is available exclusively to manager magazin.
According to DZ Bank, the companies in the Dax, MDax and TecDax, combined in the market-wide HDax, will pay out a total of 57 billion euros in dividends to their shareholders this year.
That is an increase of an impressive 30 percent compared to the previous year.
However, the past dividend season was heavily influenced by the corona pandemic, which affected the business figures of many companies and weighed on profits.
In addition, there were sometimes regulatory restrictions that limited the distributions of some public companies.
Not so in 2022. Many corporations were doing good business again in the past few months, until the war in Ukraine affected the economy again.
The result was considerable profits in 2021, which shareholders can now also look forward to.
DZ Bank has determined that more than 60 percent of the companies examined will increase their dividends this year.
Just 4 percent of companies are cutting their payouts, and a modest 17 percent pay no dividends at all.
Car manufacturers, industry and insurers pay a lot
According to DZ Bank, the return to the road to success is also reflected in a normalization of the payout ratios of the corporations.
According to the bank, there was a discrepancy between corporate profits and distributions in 2021 because the latter did not fall as much as profits.
In the past twelve months, however, this imbalance has leveled out again, according to the analysis.
The rate of distributions fell back to the area of the long-term average and is around 40 percent.
Most of the payouts come from the automotive, industrial, and insurance sectors, which pay more than 50 percent of distributed dividends.
At the forefront is the auto industry, including its suppliers, who alone account for almost 25 percent of the total dividend.
Consequently, the company with the largest single sum among all dividend payers considered this year also comes from the automotive industry.
It's Mercedes Benz.
Despite the chip crisis and other supply bottlenecks, Mercedes is making billions in profits.
A few days ago, the manufacturer announced that the dividend should more than quadruple this year from EUR 1.35 per share to EUR 5 per share.
The Stuttgart-based group is paying out a total of 5.3 billion euros to its shareholders this year – the highest figure in the overall field analyzed.
The insurer Allianz follows in second place with 4.4 billion euros, ahead of the car manufacturers BMW and Volkswagen with 3.8 billion euros each.
However, the absolute amount of the dividend is not very meaningful for shareholders.
More like the dividend yield.
It results when the distribution is set in relation to the share price.
The dividend yield roughly indicates the percentage at which the capital employed earns "interest" through the distribution of profits in the case of a shareholding in a company.
This is a common point of view, especially in times of the lowest interest rates on the financial market.
According to DZ Bank, two companies from the automotive sector are currently achieving particularly high dividend yields: BMW (8.5 percent) and Mercedes-Benz (6.8 percent).
Volkswagen with 5.8 percent and Porsche SE with 5.3 percent are also impressive.
The media companies RTL (8.7 percent, the top value in the field) and ProSiebenSat1 (7.2 percent), the chemical group BASF (7.2 percent) and the plastics manufacturer Covestro (7.7 percent) also offer impressive returns.
Average dividend yield in the Dax of 3.5 percent, bond yield around 1 percent
Overall, according to DZ Bank, the Dax currently has an average dividend yield of 3.5 percent, as do the European indices EuroStoxx50 and Stoxx 600. Stock dividends therefore continue to offer a significantly higher yield than, for example, federal bonds, whose yield is based on the standard ten-year term is currently just over 1 percent.
However, the dividend lead has shrunk recently because bond yields have risen in response to the central banks' tighter monetary policy.
In the US, bond yields are higher
For comparison: In the USA it is exactly the other way round.
There, the central bank is taking more decisive action against inflation than the European Central Bank (ECB) in the euro zone.
The Fed has now raised its key rate twice, in March by 0.25 percentage points and most recently by 0.5 percentage points in early May.
As a result, interest rates on the US financial market are higher than in the euro zone.
The yield on ten-year US government bonds – the benchmark on the other side of the Atlantic – is currently around 3 percent.
According to DZ Bank, the dividend yield in the broad US stock index S&P 500 is only 1.6 percent.
But even the dividend yield alone is hardly enough to find a good dividend stock on the stock market.
Rather, experts advise keeping an eye on a mix of factors.
In addition to the amount of the dividend and the dividend yield, this includes the continuity with which a company makes its distributions.
Companies that have reliably paid out stable or even increasing dividends over many years are also referred to as "dividend aristocrats".
On the local stock market, for example, BASF and the insurers Allianz, Munich Re and Hannover Re can be counted in this category.
Investors interested in dividend income should be on the lookout for such stocks.
The time to get started seems good, because according to DZ Bank, the distributions will also increase in the coming years.
The bank expects a total of 62.7 billion euros from the HDax groups in the coming year.
In the following year there should be a further increase to 66.1 billion euros.