2 DAX stocks that are attractive without a dividend increase | news

There are DAX stocks that can shine with many dividend increases. And some who may not get to it. In the end, we always have to wait until the next dividend season before we know what plans management is actually pursuing.

Charts for the values ​​in the article

Let’s just be a little pessimistic. But even from this perspective, I see at least two DAX stocks that are attractive without dividend growth. Here are a few exciting details.

DAX share Fresenius, which would be attractive without a dividend increase!

A first DAX stock that would now be attractive without a dividend increase is certainly that one Fresenius (WKN: 578560). With a distribution of EUR 0.92 per share and a share price of EUR 24.70, the healthcare group now has a dividend of 3.72%. It’s a solid, high level. But one thing first: I strongly believe that management will maintain a minimum level of increase simply because of its status as a dividend aristocrat. But let’s wait and see.

The bottom line is that there is more to be said for strong, stable payouts. Behind Fresenius is a share that not only has earnings per share of EUR 0.92. No, the value should remain above 3 euros per share, even if the consolidated result falls slightly during the financial year 2022. Concretely, this means that the payout percentage is really, really low.

With the DAX share Fresenius, solid returns can be possible even without a dividend increase. With a price-earnings ratio of less than 10, arithmetically, an excess dividend in the double-digit percentages beckons. So I see a lot of margin of safety in the defensive healthcare stock and Dividend Aristocrat.

Vonovia: Consistency for High Passive Income!

The other DAX stock that looks attractive today without a dividend increase is also that Vonovia (WKN: A1ML7J). Looking at the last distribution of €1.66, the dividend yield would be almost 6.4% at a share price of €25.94. For passive income that comes from residential real estate, which is a very, very defensive business, that’s a really high value.

What are the other results? Finally, for me, that the funds from the operation per quarter was over 0.70 euros per stock. But also that the debt is so high that the management has to sell real estate for 13 billion euros. This is likely to result in growth slowing or funds from operations per share again shrinks. At least in times of rising interest rates, there is a little more uncertainty.

For me, the decisive factor will be that the management of Vonovia’s DAX share can always report funds from operations per share, which on the one hand keeps the dividend affordable. But on the other hand, allow sufficient flexibility for the repayment of obligations and increasing interest. If successful, the stock is also a solid provider of strong and high passive income with a favorable price-to-FFO ratio.

The article 2 DAX stocks that are attractive without a dividend increase appeared first on The Motley Fool Germany.

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Vincent owns shares in Fresenius and Vonovia. The Motley Fool recommends Fresenius.

Motley Fool Germany 2022

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