German Dividend Aristocrats - The 2018 Update

by: rickrack
Summary

The German Dividend Aristocrats (GDA) have been updated - this is the 2018 version.

There are 38 (+8) identified Dividend Aristocrats in Germany as of July 2018.

Only five companies (-1) have raised their distributions for 10 or more years.

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

Introduction

The main season (April to June) for dividend distributions in Germany is over now. Time for a new update of the German Dividend Aristocrats (GDA).

Two years ago I introduced this new source for dividend growth investors. Last year there was the update for 2017. Check out the original articles:

This list below 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.

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.

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.

My analysis goes back to the year 2000 - please check out the original article for explanation.

The main results

  • 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 (July 2018) there are 38 companies included

Again I have increased the number of underlying stocks for analysis: the number of checked companies now includes a total of 185 analyzed stocks. 178 of them paid a dividend in 2018 for fiscal year 2017 (you know that in Germany the dividend is paid annually in almost all companies). Seven companies completely cut their dividend.

The average numbers for 2018 are:

  • Average number of years of dividends increased: 3.25 (3.09 in 2017)
  • Average number of years of dividends maintained: 6.68 (6.11 in 2017)
  • Average number of years of dividends paid: 10.72 (10.22 in 2017)
  • Average Dividend Yield: 2.88% (2.47% in 2017)

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

  • Raised dividend (5 to 9 years): 14 companies
  • Raised dividend (10+ years): 5 companies
  • Maintained dividend (5 to 9 years): 72 companies
  • Maintained dividend (10+ years): 33 companies

Here is the GDA 2018 (38 companies in alphabetical order):

Source: own research, prices from July 2018

The GDA now shows 38 companies which is 8 more than last year.

New to the list are:

  • Evonik (OTC:EVKIF) - new entry because of 10 years maintained dividend
  • Hornbach Holding (OTC:HBBHF) - re-entry because of earlier declared dividend
  • Lechwerke - new entry/new discovery
  • SAP (OTC:SAP) - new entry because of a correction
  • Sto SE - new entry/new discovery
  • Syzygy - new entry/new discovery
  • Umweltbank - new entry because of 10 years maintained dividend
  • VTG (OTC:VTGBF) - new entry because of 10 years maintained dividend

Off the list are: (-)

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

One company left the group this year:

  • Paul Hartmann: the company "only" maintained the dividend after 12 yearly raises.

The two German companies with the longest series of increases are Fresenius and Fresenius Medical Care. They have raised their dividend for 18 years. This makes them the two German companies with the longest history of dividend increases.If you are looking for more details about Fresenius: please take a look here.

The following selection shows the 33 companies that have maintained their dividend for at least 10 years (in alphabetical order, without the five "increasers"). Together with the five companies mentioned above they form the German Dividend Aristocrats GDA - also in alphabetical order:

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 raised dividends
  • At least 3% dividend yield
  • Sorted by descending dividend yield

The highest yielding German Dividend-Increasers are:

Source: own research, prices from July 2018

Dividend-Maintainers:

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

The highest yielding German Dividend-Maintainers are:

Source: own research, prices from July 2018

Conclusion

The complete selection of the GDA (German Dividend Aristocrats) is work in progress. Updates and upgrades will be added every year. 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, ALIZF, BAYRY. 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.