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Mercedes-Benz stock probably offers the highest dividend yield
High dividend yield mainly in the automotive and insurance sectors
Low dividend yields for growth-oriented companies
Over the past few weeks, shareholders have had to deal with bad news: from the dramatic increase in inflation rates to the Omicron wave and the war in Ukraine. But DAX dividends were little affected. On the contrary: 36 of the 40 companies in the first German index are likely to pay a dividend – of these, 34 are even expected to increase their dividends. Of particular interest is a look at the company’s dividend yield: this figure indicates the relationship between the dividend and the current share price and therefore offers investors an indication of a stock’s yield. From this perspective, which DAX stocks are particularly interesting in this dividend season?
Over 7% dividend yield: Mercedes-Benz, Covestro and BMW
In all likelihood, Mercedes-Benz shares will offer the highest dividend yield this dividend season. According to data from “Brese Online”, the long-established Stuttgart-based company has a lavish return of 7.88%. The automaker will triple its dividend from last year, rising from the expected EUR 1.30 to EUR 5.00 per Mercedes-Benz share.
Materials maker Covestro, spun off from Bayer’s plastics division in 2015, follows closely behind. In terms of dividend yield, Covestro (7.45%) clearly outperforms its former parent company Bayer (3.17%), as Bayer shares have recently performed significantly better than Covestro shares. BMW is in third place among the top DAX dividend payers. Shares of the Bavarian automaker offer shareholders a dividend yield of 7.34%.
High dividend yield, especially in the automotive and insurance sectors
Two other companies in the automotive industry come in the next places with the highest dividend yields: besides Mercedes-Benz and BMW, Volkswagen (4.8%) and Daimler Truck (4.78%) also offer a dividend yield respectable. Porsche shares (2.90%) are also interesting in this respect.
DAX representatives of the insurance sector are traditionally good dividend payers. Dividend yields are also high this year: Allianz (4.95%), Munich Re (4.53%) and new DAX member Hannover Re (3.77%).
Also in the top 10: BASF, E.ON and HeidelbergCement
Besides these auto and insurance stocks, there are three other DAX stocks in the top ten that come from different sectors. The first and most important is BASF: the chemical giant from Ludwigshafen is convincing, as is often the case in this dividend season, with a breathtaking yield of 6.52%.
With a yield of 4.71%, the generous energy supplier E.ON is well ahead of its competitor RWE (2.29%). However, RWE investors will certainly be able to live with this, as RWE has fared significantly better than E.ON on the stock exchange in recent years. HeidelbergCement is also in the top ten (4.61%). The building materials company has been offering its investors a high dividend yield for years, while HeidelbergCement’s stock price has been low for several years.
Deutsche Post, Deutsche Telekom and Siemens with high payouts
In the upper middle there are several traditional German companies from different areas. Deutsche Post, whose share price has lost ground in recent weeks after a temporary surge in the krona, is still offering its shareholders a hefty dividend yield of 4.24%. Investors in Deutsche Telekom (3.71%) and Siemens (3.31%) can also expect a premium. Shares of real estate giant Vonovia, which took over sector rival Deutsche Wohnen in the fall of 2021, are also spoiling investors with a dividend yield of 3.84%.
SAP and Linde with significant dividend increases
The two DAX heavyweights, SAP and Linde, do not offer particularly high dividend yields of 2.46% and 1.45% respectively, but both companies are increasing their dividends considerably compared to last year. Important for Linde: Since the company’s merger with the Irish company Praxair in 2018, Linde has its headquarters in Dublin and is also listed on the American S&P 500 index. As a result, Linde does not pay an annual dividend, but four dividends quarterly. This dividend policy is common in the United States.
After last year’s zero figure: Airbus, Deutsche Bank and Continental pay dividends again
Last year, the number of companies distributing profits from the DAX was lower than in 2022. Due to corona, Airbus, Deutsche Bank and Continental have waived a profit distribution in 2021. This year, however, the three companies pay again: tire maker Continental is again one of the offensive dividend payers with 3.33%, while Deutsche Bank (1.69%) and Airbus (1.35%) take it easy . DAX’s second-largest aerospace company, MTU Aero Engines, offers investors a low dividend yield of 1.01%.
Dividend payers in the middle: Fresenius, Brenntag, Deutsche Brse and Co.
Many companies in various industries are in the middle dividend range: In addition to DAX newcomers Brenntag (2.00%) and Siemens Healthineers (1.69%), there are also DAX veterans such as the medical technology Fresenius (2.77%), dialysis provider Fresenius Medical Care (2.22%), Deutsche Börse (2.00%) and sporting goods manufacturer adidas (1.52%).
Five companies offer less than 1% dividend yield
The group of DAX companies that offer less than 1% dividend yield, but don’t want to give up a dividend entirely, are a diverse group. These include semiconductor maker Infineon (0.98%) and currently hugely successful pharmaceutical company Merck (0.97%). Three groups newly integrated as part of the DAX expansion in 2021 also offer low dividend yields: sporting goods maker PUMA (0.94%), Lower Saxony flavors maker Symrise (0 .94%) and laboratory supplier Sartorius (0.37%). After all, the five companies mentioned here increased their dividend payouts from the previous year; In addition, the price of their shares has changed very strongly in recent years.
Four growth-oriented companies pay no dividends
Ten percent of DAX companies, or four companies, are not paying a dividend this year: food supplier Delivery Hero, meal kit service provider HelloFresh, biotech company QIAGEN and online fashion retailer Zalando . These four companies paid no dividends last year and prefer to reinvest earnings for future growth. But Delivery Hero hasn’t even made a profit in the past year. On the contrary, the Berlin company is still loss-making, but sees itself on the right track in view of the strong growth in sales.
The dividend yield levels shown here are expected values. The actual payout ratio, on the other hand, will only be decided at the companies’ respective general meetings. It is therefore entirely possible that actual earnings distributions will differ from the dividend yields projected here – especially since the dividend yield is directly influenced by share price movements. The rule of thumb here is: the weaker the stock price moves, the higher the dividend yield, provided a fixed dividend has been announced beforehand.
Incidentally, the DAX’s dividend season kicked off in mid-February with chipmaker Infineon. A particularly large number of general meetings are scheduled for the end of April and May. In all likelihood, the DAX dividend season will end with QIAGEN; the biotech company’s annual general meeting is scheduled for June 29, 2022.
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