Of course, it makes a difference whether you want to invest 500 or 10,000 euros in DAX shares. But if you are business oriented, you should ideally have such a high degree of conviction that an investment of any size has a good risk/return ratio.
Today let’s take a look at two particularly exciting DAX stocks where I believe an investment is not a mistake. They both possess solid yields and other qualities. As well as, in particular, a favorable valuation and a margin of safety.
DAX share Allianz: No mistake to buy now?
With DAX share of alliance (WKN: 840400) still has a positive rating. A share price of 202 euros is again slightly above the low point level in the recent sell-off. However, the adjusted price-earnings ratio should only be 11. In addition, there is still a dividend of just over 5%. Not bad, right?
For an investment thesis, this means that there should be solid return potential in the medium to long term through the dividend alone. In addition, the management will invest one billion euros in share buybacks in the coming months. This is not just another capital measure, but also an opportunity to create long-term added value for investors.
However, the key thing for me about this DAX stock is that pessimism actually still reigns. 2022 saw another low point with the settlement of the Structured Alpha case. Operationally, the third quarter largely marked a turning point. But when the stock market and the 2023 financial year are back to normal (an operating profit of 13.4 billion euros for 2022 is pretty normal to good), the stock should also find its way back on track. Allianz would then still have room for dividend growth and share buybacks.
Fresenius: Interesting margin of safety
The DAX share Fresenius (WKN: 578560) also has an interesting value profile for me. With a share price of around EUR 24, the 2022 price-to-earnings ratio should also be below 10. There is a drop in profits this year and operating results have been extremely mixed since 2018. Stagnation and declining results have been the order of the day since then. What we must not forget, however, is that Dividend Aristocrat has been very profitable throughout the period and can easily afford its dividend of EUR 0.92 per share. At the latest with a payout percentage of even less than 30%.
The Fresenius share should therefore continue to provide a stable dividend of 3.8%. This means that here too we can discover a solid value potential. Of course, the new management around Michael Sen had to get a handle on the problems at the listed subsidiary Medical Care. Ideally, management should also reduce the debt burden in the medium term. However, the market has priced in a fair amount of pessimism for the DAX dividend aristocrat in recent years.
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Vincent owns shares in Allianz and Fresenius. The Motley Fool recommends Fresenius.