Are you looking for a high return? No problem: Our leading domestic index, DAX, has meanwhile produced many names that can excel with it. For foolish income investors and dividend hunters, it is now particularly important to assess the opportunities with justified risks.
However, there are two other DAX shares that I am now buying. Among other things, it is the high yield that fascinates me. But it’s about more. I also see an interesting overall mix in terms of business orientation, which I am basically interested in.
Are you looking for a high return? DAX shares Munich Re!
A first DAX stock that I am now buying is that of Munich Re (WKN: 843002). The high return is part of my investment dissertation and probably also a fixed component of the total return. In any case, at a share price of around 220 EUR per share. share, attracts a dividend of 5%. Not bad for me, especially since there are moderate stock buybacks.
But I still like the overall package commercially. Munich Re’s shares promise moderate earnings growth over the medium term (at least according to current forecasts) with a favorable valuation. The price-to-earnings ratio is just over 10, the book value roughly in line with the share price. On the other hand, we have already discussed the dividend yield. Pretty interesting if you are looking for solid, timeless returns.
The high yield is therefore only one property. But I can smell solid earnings returns for years and decades. It’s a bit like dividend history: after all, management has not cut payout per share a single time since 1969. This shows how profitable the DAX stock has been for decades. At least in total.
Vonovia: Residential real estate is interesting
The DAX stock is also currently offering a high dividend Vonovia (WKN: A1ML7J). If we take the previous distribution of EUR 1.66 as a reference and compare it with a share price of EUR 28.01, we get a dividend of 5.92%. And with residential properties. Crazy actually … and very, very defensive.
But what else happens at Vonovia? The acquisition of Deutsche Wohnen was to deliver solid growth in funds from operations per. shares. The price-FFO ratio for the current financial year is probably less than 10. The net asset value (net asset value, net tangible assets) is also significantly higher than the current share price. So we might see a nice discount.
A high return and a value investment task is therefore sufficiently core for me. In times of inflation, the pricing power of residential real estate is limited by the attention of the public and the media. But based on the valuation, I still sense solid, strong returns over years and decades.
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Vincent owns shares in Munich Re and Vonovia. The Motley Fool does not own any of the listed shares.