On share of Munich Re (WKN: 843002) saw a nice sale on Tuesday this week. The share certificates adjusted by more than 6% to EUR 216.10 per share. shares. Reasons? Let’s put it down to the market as a whole or just to a general underperformance. peers alliance has also had less success.
But let’s stick to today’s topic: At this stock price level, the Munich Re share finally yields a return of 5% again. If we set the previous 11.00 EUR per. share in relation to 216.10 EUR, to be more precise, we even get almost 5.1%. This is definitely an attractive value. Let us put this assessment goal in context. After all, foolish investors already know the quality of this DAX dividend stock!
Munich Re: 5% dividend pretty rare!
Nevertheless, once again pro forma: Munich Re’s dividend of 5% is likely to be a value that is practically carved in stone for management. After all, the DAX reinsurance company has not reduced its own payout per share. stock since 1969. So it is a good indicator of the past. The overall valuation is also good value with a price-to-earnings ratio of just over 10. Actually, there should also be moderate growth and dividend growth in the following years. It’s possible.
Looking back, however, we see that a 5% dividend is not common for Munich Re shares. From time to time, as in Corona Flash Crash. However, in the subsequent period, there was only a short-term opportunity around 30 October 2020 to grab the stock for a dividend of EUR 9.80 and a price level of EUR 200.80 with a dividend of 4.8%. In July 2021, on the other hand, the share certificates were directed to 228 euros in Germany due to the storm. At that time, the dividend yield was only 4.3 per cent.
We therefore see a dividend of 5% at Munich Re as a relatively high value with a favorable valuation. What is special about this stock market year, 2022, is also that the management has increased the dividend by more than 12%, which is a sign of strength. But at the same time, the share price has fallen markedly. This makes the starting position even more attractive, especially as there are still share buybacks with a total volume of one billion euros.
It is of course your decision whether the Munich Re share is a rare option for you with a dividend of 5%, or whether you say: This time it is different, the risk / return ratio has changed. However, I tend to rate the share of DAX reinsurance as very stable in the long run. The dividend history, which has been intact since 1969, shows that management can plan conservatively no matter what disasters occur.
Anyone who bought with a dividend of 5% in recent years would often have given a solid return. In addition to the dividend also due to a certain share price development. It does not have to be arguments for a purchase, but they can be. In any case, the stock is basically cheap and the outlook remains geared towards moderate growth.
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Vincent owns shares in Munich Re. The Motley Fool does not own any of the listed shares.