The 2017 Update Of The German Dividend Aristocrats

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Includes: AXELF, BAYZF, BHTLF, DHRPY, FLMNY, FMS, FPRUF, FSNUF, FUPBY, GKSGF, HELKF, LNAGF, MTUAY, MURGY, SBMDY, SIEGY, STWRY, SYIEF, VIBVY
by: rickrack

Summary

The list of the German Dividend Aristocrats has been updated and it's a possible source for investors who are seeking more international exposure.

There are 30 (+2) identified Dividend Aristocrats in Germany as of June 2017.

There are still only six companies that have increased their distributions for 10 or more years.

24 companies have at least maintained their payments for 10-plus years.

Introduction

Nearly one year ago I introduced a new source for dividend growth investors: the German Dividend Aristocrats (GDA). Check out the original article here.

This list is for informational purpose only. I am not going to create a portfolio out of all these companies. It should be a helping hand for investors who are seeking more international exposure. As you know: international diversification can help dividend growth investors reduce risk and enhance total return.

Please look at these stock selections as exactly what they are: possible candidates for further research of your own.

One word before we start: I am not a native English speaker. There might be some formal mistakes or "rough language" - I hope you can "ignore" that. My apologies for that.

Here we go.

The German Dividend Aristocrats - a short definition

The definition of the selection is given by its name:

"German":

I have included stocks from companies which are based in Germany (headquarters in Germany) plus companies which are listed at one of the German stock exchanges but based outside of Germany (headquarters not in Germany). Nearly all of the companies in the list belong to the first group ("German" companies).

"Dividend":

The compilation includes only companies that pay dividends. This shows a significant difference from the situation in the United States: First, it is not self evident that companies pay dividends. Secondly, German companies usually pay an annual dividend (and not quarterly). That means there is only one distribution over the year. The main dividend season in Germany is from April to June when most general meetings are held.

"Aristocrats":

Aristocrats are all "noble" companies that have not reduced the dividend for at least 10 years. The term "aristocrats" therefore is expanded; it does not only include the dividend increasers. The reason is simple: in Germany there are hardly any companies that do this for decades. Therefore it also includes companies that have maintained their dividend.

In a nutshell:

  • The German Dividend Aristocrats are an exclusive group of German stocks that have not reduced their distributions for at least 10 years. I will call them the "GDA" as a short synonym
  • At the moment (June 2017) there are 30 companies included

I have increased the number of underlying stocks for analysis: the number of checked companies now includes a total of 165 analyzed stocks. 159 of them paid a dividend in 2017 for fiscal year 2016. Six companies completely cut their dividend.

My analysis goes back to the year 2000 (no further). The reasons for this "cut" are as follows:

  • in the year 2000 the new European currency (Euro) was implemented
  • there are only a few companies that have a longer series
  • the year 2000 is a good starting point for building up a comprehensive list

The main results

Let`s have a look on the average numbers first:

  • Average number of years of dividends increased: 3.09 (2.66 in 2016)
  • Average number of years of dividends maintained: 6.11 (5.88 in 2016)
  • Average number of years of dividends paid: 10.22(9.39 in 2016)
  • Average Dividend Yield: 2.47% (2.95% in 2016)

And now let's break down the number of companies and their dividend increases:

  • Increased dividend (5 to 9 years): 36 companies (24 in 2016)
  • Increased dividend (10+ years): 6 companies (the same 6 as in 2016)
  • Maintained dividend (5 to 9 years): 60 companies (52 in 2016)
  • Maintained dividend (10+ years): 30 companies (28 in 2016)

Here is the GDA 2017 (alphabetical order):

The German Dividend Aristocrats 2017

Source: own research, prices from June 2017

The GDA now shows 30 companies which is 2 more than last year.

New to the list are:

  • CTS Eventim (CEFMY)
  • GFT Technologies
  • MBB Industries
  • Symrise (OTCPK:SYIEF)

Off the list are:

  • Hornbach Holding (OTC:HBBHF) - no dividend declared yet
  • Schaltbau Holding

The following six companies have increased their dividend for 10-plus years (in alphabetical order):

The two German companies with the longest series of increases are Fresenius and Fresenius Medical Care. They have increased their dividend for 17 years. This makes them the two German companies with the longest history of dividend increases. If I had analyzed the years before 2000 Fresenius would be the first German company with 25 increases in a row. They have increased their distribution from 1993 onwards.

The following selection shows the 24 companies that have maintained their dividend for at least 10 years (in alphabetical order, without the six "increasers"). Together with the six companies mentioned above they form the German Dividend Aristocrats GDA - also in alphabetical order:

The most stable and secure dividend of Germany is paid by the world's largest reinsurer: Munich Re - headquartered in Munich, Germany. It has not reduced its dividend since 1969. For my selection the company gains a full 17-year streak.

The Top Stocks

To come to concrete recommendations for further research I have created two so-called top lists: Dividend-Increasers and Dividend-Maintainers.

The rules for these two lists are as follows:

Dividend-Increasers:

  • At least 5 years of dividend increases
  • At least 3% dividend yield
  • Sorted by descending dividend yield

The highest yielding German Dividend-Increasers are:

Dividend-Increasers

The selection shows 11 companies (7 in 2016). New to the list are Munich Re, Dt. Euroshop, LEG Immobilien, Leifheit and Talanx (all because they increased the dividend for the fifth year in a row) and Bertrandt (because of higher yield).

Off the list are two companies: Baywa and KPS.

Dividend-Maintainers:

  • At least 10 years of dividend increases
  • At least 3% dividend yield
  • Sorted by descending dividend yield

The highest yielding German Dividend-Maintainers are:

Dividend-Maintainers

Conclusion

The complete selection of the GDA (German Dividend Aristocrats) is still work in progress. Updates and upgrades will be added from time to time. I will keep posting any news here on Seeking Alpha.

The GDA might be a good starting point for anyone who is interested in more international diversification.

Let me give you some quick information for non-German investors: there is a German tax on all dividends, which is called "Abgeltungssteuer." This tax is automatically deducted by the banks or online brokers. It is exactly 26.375% (25% tax and an additional 1.375% as special tax we Germans have to pay since the reunification). For US investors it is limited to 15% by tax treaty between US and Germany. For US IRAs there is no German dividend tax by treaty amendment.

Important information: I have created this list on my own. The data source for all the data is direct contact to the investor relations teams of the companies. In some cases where I did not get any answer to my questions I got the information from the company website and/or further web research.

I am looking forward to reading your comments. I am happy to have your feedback to improve the compilation. Let me know if there is anything you miss.

Disclosure: I am/we are long MURGY, SIEGY, BASFY, VIBVY.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.