More value, more returns: 2 (almost) dividend aristocrats who are now a buy for me | news

More value, more defensive class and more returns with (almost) dividend aristocrats? Right. Today we will take a look at two exciting top stocks that are either already noble or well on their way in that direction.

To predict: It’s about Fresenius (WKN: 578560) and WP Carey (WKN: A1J5SB). But let’s take a look at what these two top stocks can do now and why, under certain conditions, they should definitely be worth buying.

Fresenius: Dividend aristocrat with solid return potential!

A first top stock that is a true Dividend Aristocrat is Fresenius. The management of the DAX Health Group has been increasing its own dividend every year for more than 25 years. And not too little over time. Dividend growth of around 4.5% is still the lowest benchmark in recent years, allowing for solid, moderate growth in payouts.

However, Fresenius has some strong traits that are now geared towards solid returns. The stock recently fell below the EUR 30 mark to EUR 29.63. As a result, the price-to-earnings ratio fell to as low as 9. The dividend yield is also very, very attractive at 3.1% for a payout percentage of less than 30%. So it is a defensive, conservative and relatively narrow paying top stock at a good price. And with a timeless orientation.

Fresenius is, after all, backed by a strong healthcare company that made the race aristocrat’s race possible in the first place. There are four business areas with hospitals, medical products, services and dialysis. At least I see the chance for a solid return over the next ten years, also because of the dividend. But also a lot of value, which can lead to further price returns in the long run.

WP Carey: Almost … but not yet

US REIT WP Carey is still the aristocrat with almost dividends in this overview. But management has now increased dividends annually 24 years in a row. In the next twelve months, the real estate investment fund is likely to officially belong to the ranks of aristocratic distributors.

As a real estate investment fund, WP Carey offers a little more. With a quarterly dividend of $ 1,057 and a stock price of $ 80.97, the dividend yield is an attractive 5.22%. This means that investors get a very solid dividend potential right from the start. A payout ratio of less than 80% is acceptable for a REIT. The yield seems at least very safe.

The most exciting thing about Almost Dividend Aristocrat, however, is the built-in protection against inflation. Finally, for 59% of all contracts, management has linked an annual adjustment of rental income to the inflation rate. That could mean moderate growth now. For me, this with a price-FFO ratio of currently 15 is also an opportunity to create a solid return in the long run.

The article More Value, More Returns: 2 (almost) Dividend Aristocrats That Are Now a Buy For Me article first appeared on The Motley Fool Germany.

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Vincent owns shares in Fresenius and WP Carey. The Motley Fool recommends Fresenius.

Broget Fool Germany 2022

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