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5 German Dividend Growth Stocks (Part I)

Mar. 02, 2018 11:03 AM ETSAP, FLMNF, FSNUF, FUPEF, SBMAF2 Comments
Torsten Tiedt profile picture
Torsten Tiedt


  • German companies don’t care that much about years of dividend increase.
  • But years of dividend increase is not a synonym of dividend stability.
  • Stable dividend growth stocks in Germany exist.
  • I show you five of them.

The lack of dividend increase in Germany

Safety first. This motto is wide spread in Germany, and it holds true for dividend payments, too. You can feel the pain of SAP’s (OTCPK:SAPGF) management confessing that the pay-out-ratio increased once again:

Source: SAP annual report 2009

Here is what “another slight increase” of the pay-out-ratio looked like back in 2009 leading to a flat dividend:

Source: Stock screener dividendstocks.cash

A flawless history of dividend increase sacrificed for the sake of the pay-out-ratio. This raises the question if companies like SAP can still be considered dividend growth stocks? Literally speaking, dividend growth means growing dividends over time. This growth needs to be reliable/stable and preferably high/dynamic. Both can be achieved even if dividends remained flat for a year or two.

Comparing SAP with some of the most long-serving dividend aristocrats reveals, that both stability and dynamic of SAPs dividend growth is competitive. Although the current dividend yield of 1.46% is modest (on pair with Parker-Hannifin (PH)), dividend growth (CAGR 10 years and CAGR 5 years) and stability (dividend stability) are among the best.

Source: Stock screener dividendstocks.cash

I can read you mind: “how can a stock not increasing its dividends for two years claim a higher dividend stability than any other stock increasing its dividend on yearly basis?”

Stability is more than “just” increase. It’s an increase in equal steps. Looking at American States Water, we see two different phases of dividend growth. A phase of slow growth until 2010 succeeded by a phase of fast dividend growth. Accelerating dividend growth is not a bad sign, but it leads to a decline in stability. You could ask your-self, when the company enters phase 3 and how it looks like.

Source: Stock screener dividendstocks.cash

Don’t get me wrong. All stocks shown in the list

This article was written by

Torsten Tiedt profile picture
Torsten Tiedt is a senior developer in the investment industry in Frankfurt, Germany. He was working for KPMG for eight years. During this time, he was part of a team of specialists dedicated to analyze security portfolios of international funds, hedge funds and banks. Among other, he participated in the liquidation of Lehman Brothers and the first banking stress test of the European Central Bank.Later he took the lead in developing software for securities lending in a small private company, before he created his own start-up to develop a new kind of stock screener dedicated to long term dividend growth investors: DividendsStocks.Cash.

Analyst’s Disclosure: I am/we are long SAP, FLMNF, FSNUF, EMR. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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