In brief:
- The DAX is one of the major European indexes and comprised of the 30 largest and most traded companies in Germany.
- It represents around 80 percent of the market capitalization of listed stock corporations in Germany.
- We will have a look at the dividend-paying stocks which are a member DAX.
- There are 4 European dividend aristocrats in the DAX-index.
Recent Changes to the DAX
Index provider STOXX announced earlier this year that according to the new Insolvency Rule (section 5.1.1) Wirecard AG(ISIN DE0007472060) is deleted from the DAX index, effective August 24th. Wirecard is replaced by Delivery Hero SE(ISIN DE000A2E4K43).
In June Deutsche Lufthansa AG left Germany’s DAX index and has been replaced by the real-estate company Deutsche Wohnen SE.
For non-European investors, it is important to know that dividends are somewhat different than in the US. Dividend pay-outs (ex-dividend) are often once per year in April or May. Unlike the US dividend aristocrats, it is also not common to increase the dividend year by year. Only one stock as part of the DAX-index managed to increase the dividend payout for 25 consecutive years in 2020.
DAX Stocks Dividend History
There are several angles to define “best” DAX Dividend Stocks, especially given the fluctuations in yearly dividends. The first angle, we took is the dividend history.
When an investor is looking for dividend aristocrats stocks in the DAX, they will only find one “pure” dividend aristocrat. The dividend stock Fresenius (FRE.XETRA) is the only stock that managed to increase its dividends for 27 consecutive years in 2020.
This COVID-19 year has been difficult for the dividend-paying stocks in the DAX. Seven of 30 DAX stocks did have to cut their dividend and another 7 companies didn’t increase their dividend pay-out in 2020. Four stocks managed to increase their dividends for ten consecutive years or more. This means that are 4 true European dividend aristocrats in the DAX-index. Those for aristocrats are:
The table below lists all DAX stocks including their dividend paid per year and the number of consecutive dividend increases since 2010. The colors indicate whether the dividend increased, was stable, or decreased compared to the previous year.
Please note that Linde PLC (LIN) is also listed in the US and is a dividend aristocrat based on the S&P-rules given the merge with Praxair. Adidas has de facto suspends dividend payments for the duration of its COVID-19 related syndicated loan facility, since this is one of the conditions set.
DAX stocks by Dividend Yield
The second angle is the dividend yield. The current average dividend yield is 2.7% for all DAX stocks. The table below lists the company, its last price (19-Oct-2020), current annual dividend, and dividend yield.
DAX stocks by Dividend Growth
The third angle is dividend growth. The average dividend growth is around 10% for all DAX stocks. The table below lists the company and the dividend growth percentage of the last year (2020-2019).
Members can use the DAX-screener.
More information on the DAX-index and a downloadable excel are available to everyone in our post on the DAX-index.
Other Sources of Dividend Investment Ideas
The Dividend Aristocrats list is not the only way to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of less than 20 businesses with 50+ years of consecutive dividend increases.
- The MoneyInvestExpert Defensive Aristocrats is a performance-based top-10 selection of the Dividend Aristocrats to outperform the market on the long-term.
- Portfolio lists like the Berkshire Hathaway Portfolio or Bill Gates’stock portfolio can be a source.
- For the European focused investors there is also the list of European Dividend Aristocrats.
- Dividend Champions are not necessarily members of the S&P 500 index, have increased their dividend for 25 or more consecutive years.
- 100+ years of dividend, the list of stocks that pay over 100 year of dividend can be an list of inspiration.
Next to selecting the right dividend stocks, important principles for successful long-term investing are Disciple, Diversification, Defensive & indeed Dividend. Read more about this in our free e-book.
Also, our monthly newsletter and premium member data will help you to invest smarter.
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