Financial expert analyzes German dividend aristocrats such as Allianz and Munich Re as well as the earnings prospects of Siemens and Deutsche Telekom

Financial expert analyzes German dividend aristocrats such as Allianz and Munich Re as well as the earnings prospects of Siemens and Deutsche Telekom

According to a report by www.boersen-zeitung.de The importance of dividends for stock investing is underestimated, even though they represent an important value driver. According to a study by Philipp Immenkötter from the Flossbach von Storch Research Institute, a whopping 52.2% of the value created on the German stock market was created through dividends paid out over the past 20 years. Stock analysts point out that stocks are less attractive relative to bonds than before, but there are still high-quality companies that offer high and consistent payouts.

It's important to note that dividend yields are not always a sign of quality. Companies with extremely high dividend yields may be in financial trouble and the dividend could be at risk. It is therefore advisable to rely on broadly diversified portfolios of dividend aristocrats who have increased their distributions in recent years or at least kept them stable.

Among the high-quality dividend aristocrats are companies such as Allianz, Munich Re and Talanx in the insurance sector, which are expected to increase their dividends. Siemens, Deutsche Telekom and Deutsche Post also offer attractive dividend yields. However, there are also disappointments, as was the case with Vonovia, which significantly cut its dividend. Additionally, while companies like VW and BASF may offer high dividend yields, there are also significant risks due to the cyclical nature of their industries and current challenges, particularly related to the transition to electric powertrains.

As an economist, I analyze that companies' dividend policies can have important effects on investors and the stock market. Companies that offer high and consistent dividends are attractive to investors because they signal long-term stability and quality. However, investors also need to keep an eye on the risks and earnings performance of companies in order to make informed investment decisions.