Exploring Three German Dividend Stocks With Yields From 3.2% To 6.8%

As global markets navigate through varied economic signals, Germany’s DAX index has shown resilience with a notable gain of 1.35% recently, reflecting a positive sentiment among investors. In this context, exploring dividend stocks in Germany could be particularly interesting for those looking to potentially enhance their portfolio’s yield in a relatively stable market environment.

Top 10 Dividend Stocks In Germany

Click here to see the full list of 30 stocks from our Top German Dividend Stocks screener.

Let’s explore several standout options from the results in the screener.

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Bayerische Motoren Werke Aktiengesellschaft (BMW) operates globally, focusing on the development, manufacture, and sale of automobiles and motorcycles, along with spare parts and accessories, with a market capitalization of approximately €55.03 billion.

Operations: Bayerische Motoren Werke Aktiengesellschaft (BMW) generates revenue primarily through its Automotive and Motorcycles segments, reporting €131.95 billion and €3.15 billion respectively, along with a significant contribution from its Financial Services segment amounting to €36.93 billion.

Dividend Yield: 6.9%

Bayerische Motoren Werke (BMW) has seen dividend growth over the past decade, but its sustainability is questionable with a high cash payout ratio of 168.2%, indicating dividends are not well covered by free cash flows. Despite trading at 54.7% below estimated fair value and offering a competitive yield of 6.85%, BMW’s dividends have been both volatile and unreliable, reflecting inconsistency in payments. Additionally, the company’s debt is poorly covered by operating cash flow, raising concerns about financial stability in challenging economic conditions.

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: DEUTZ Aktiengesellschaft is a company that develops, manufactures, and sells diesel and gas engines across various regions including Europe, the Middle East, Africa, the Asia Pacific, and the Americas, with a market capitalization of approximately €0.73 billion.

Operations: DEUTZ Aktiengesellschaft generates revenue primarily through its Classic segment, which contributed €2.01 billion, and its Green segment, with revenues of €5.30 million.

Dividend Yield: 3.2%

DEUTZ’s dividend profile shows mixed signals; while the dividend has increased over the past decade, its consistency and reliability are questionable due to significant volatility in payments. Currently, DEUTZ’s yield stands at 3.22%, lower than many top German dividend payers. However, dividends appear sustainable with a low payout ratio of 22.7% and a cash payout ratio of 38%, indicating good coverage by both earnings and cash flows. Recent strategic alliances and equity offerings may impact future performance but also provide opportunities for expansion and diversification in emerging markets like India.

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Talanx AG, with a market capitalization of €18.32 billion, operates globally offering a range of insurance and reinsurance products and services.

Operations: Talanx AG operates globally, providing a diverse array of insurance and reinsurance solutions.

Dividend Yield: 3.3%

Talanx has demonstrated a consistent ability to grow and sustain its dividends, with a decade-long track record of stable dividend payments. In the first quarter of 2024, Talanx reported a significant increase in net income to €572 million from €423 million the previous year. Despite its yield of 3.31% being below the top quartile in Germany, both earnings and cash flow strongly cover dividends, with payout ratios at 34.7% and cash payout ratios at 7.5%, respectively, underscoring reliable payouts well-supported by financials.

Turning Ideas Into Actions

Looking For Alternative Opportunities?

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com