Fresenius (NASDAQ: RNP) is the best dividend stock in one respect. Of course: It’s the only Dividend Aristocrat in the DAX. Formally, we can therefore say that there is a certain unique sales proposal.
But is the Fresenius share also a top favorite in a quantitative and qualitative check? Maybe. In any case, the business model is defensive, operationally there can be moderate growth. In addition, the fundamental valuation with a price / earnings of less than 10 is very cheap.
But let’s stick to the dividend from the DAX dividend aristocrat today. Let’s check if there is an ideal compromise.
Fresenius: Best dividend stock after return?
Let us first review Fresenius as a dividend aristocrat and possibly the best dividend stock in terms of dividend yield. Currently, the dividend yield is 3.17% at a stock price of EUR 29. Of course, this is not the highest value. But we need some context.
In the current market environment, there are quality stocks with significantly higher dividends. 4% or 5% are easily possible and realistic. Yes, even on a sustainable basis. But: For qualitative dividend aristocrats, almost 3.2% is a relatively high value.
In this regard, we can not say that we have achieved the optimum with this feature. However, Fresenius is at least a good dividend stock. But let’s review the other factors that are also relevant.
What about dividend growth?
A big plus for a quality stock and dividend aristocrat is Fresenius’ dividend growth. The dividend-paying share has increased its payout per share by between 4.5% and 5% over the past three years. That is not a record either. Historically, however, increases of up to 21% have been possible. Operational growth seemed to be the key to success.
Still, with a yield of 3.2%, even growth rates in the mid-digit percentage are very solid. In any case, there is the prospect of a long-term inflation adjustment. Or significantly higher yields over years and decades. Especially since growth is constant, cementing status as an aristocrat.
Fresenius: The best dividend stock based on the payout ratio
Last but not least, we review the payout ratio at Fresenius. Measured in relation to earnings per. share in 2021, the value is currently only 28%. This means that the dividend stock really has a whole lot of potential for further dividend growth. Even though there were only constant results in the coming years.
This is especially one of the reasons why Fresenius can be a perfect dividend stock. The conclusion is that we see a good, high yield with solid, modest growth. But also a great potential. Whether this is optimal for any investor is, of course, another question. But there is a good qualitative cross-section of many disciplines.
Our best stock for 2022
There’s a company whose name gets a lot of buzz from analysts at The Motley Fool these days. It’s for us THE BEST INVESTMENT FOR 2022.
You could also benefit from it. To do this, you must first know all about this unique business. So now we have one free special report prepared, which introduces this company in detail.
Vincent owns shares in Fresenius. The Motley Fool recommends Fresenius.