This year, German companies will be paying out record dividends to their shareholders as a consequence of the robust economic situation. According to our initial projections, shareholders of HDAX companies (this index comprises companies in the DAX, MDAX and TecDAX) are set to receive just under EUR 46bn. This represents an increase of almost EUR 4bn (8%) on the previous year. When compared with the crisis year of 2009, German companies have therefore more than doubled their dividend payments.
The dividend yield – the ratio between dividend payment and stock market price – can generally be regarded as consistently appealing (DAX 2.4%). In addition, we are expecting the dividend payouts to be even higher in subsequent years. The majority of dividends are distributed to shareholders between April and June each year, which means it is certainly possible that further investors will still get involved.
However, investors should not blindly put their money on “dividend stars”. This approach falls short and may often lead to unpleasant developments; at present, for example, Steinhoff – a company which is under suspicion of fraud – is delivering the highest dividend yield. Instead, qualitative filters in the form of investment recommendations should be taken into consideration.