The dividend strategy
Investors who pursue the dividend strategy primarily buy shares in companies with high dividend yields. In doing so, they want to secure a passive income. Investing according to the dividend strategy describes the purchase of dividend stocks with which a steadily increasing passive income can be generated.
This strategy has similar criteria as a regular long-term equity strategy: the quality of the shares with high dividends is also the decisive factor here.
So when looking for high dividend stocks, a combination of qualitative and quantitative factors is important and fundamental ratios are usually a decisive criterion in the selection process.
In addition, there are dividend indicators that become particularly relevant such as the history of the dividend or the dividend growth over as long a period as possible. This allows us to better assess whether the dividend may have been cut during a crisis in the past and whether the dividend can still be maintained or, in the best case, increased in the coming years.
List of shares with high dividend
“The dividend strategy provides us with a small, additional income that comes regularly and reliably. I have complete freedom in how I use it.” AlleAktien
Our companies, our profits
In the case of a dividend, investors receive a portion of the profit paid out in cash into their accounts. The dividend is something like a shareholder's reward. For the risk we take with our investment. If you Microsoft If you were a 100% owner of the company and you could no longer sell the shares, then the dividend would be a must for you. What good are the company's high profits if you can't pay your rent with them? In the long run, that's why most successful companies pay a dividend to their shareholders. Because that's also the best way to convince us investors to adopt a buy & hold strategy. But be careful: At first, dividends are asset-neutral. What we receive as a dividend is deducted from the share price. After all, the money is missing from the company
What is the dividend yield?
The dividend yield indicates what percentage of the share price is distributed to shareholders as a dividend.
The higher the dividend yield, the more money shareholders receive back from their company. But be careful: It is not only the amount of the dividend that should be paid attention to. Equally important is the dividend growth rate, the payout ratio and the history. A particularly high dividend yield (of more than 5%, for example) can even be a warning signal.
The appeal of the dividend
A dividend is usually paid continuously and reliably to our account and makes the cash register ring again every time. The payments are usually easy to foresee and plan, and we are pleased with every incoming payment and every dividend increase.
Cyclical markets often have little effect on a share with a high dividend. With the dividend strategy, investors are rewarded for their loyalty. The saying often proves true: the longer you hold a good dividend stock, the more you enjoy it.
That's because over time, quality companies also increase their personal dividend yields and you can watch your passive income grow.
There is no one dividend strategy. When it comes to dividend strategy, many investors think of only one option: a stock with a high dividend yield - come what may. However, that is a mistake. There are many ways to invest in dividend stocks. The two most basic strategies are the dividend growth and dividend income strategies. Most investors combine both strategies to suit their own tastes.
Dividend strategy . For many investors, dividends are one of the most popular reasons to invest in a stock. The regular income and cash flow it generates motivate investors and investors to target the dividend growth or dividend income strategy. A dream come true: Every month and every year, a whopping dividend (profit payout) comes from the company. We can use it to make a living and buy nice things. Or invest the dividend we receive in even more dividend stocks.
Prices come and go. Dividends stay. Dividends are the only form of shareholder return that no one can take away from us. Dividends mean 100% freedom of choice for investors. We can reinvest them or spend them. The choice is yours. That's what makes it so exciting to watch your dividends grow. It starts small at first, but eventually you can afford a little luxury and eventually financial freedom.
40,000 euros extra salary a year. With assets of 1 million euros and a dividend yield of 4% per year, 40,000 euros of freely disposable income (before taxes) is generated annually. And this income is considered "passive income". Because you don't have to do anything for it other than own the corresponding stock. We build up our own little "unconditional basic income", or extra pension. Some see it as a supplement to their own pension, a bonus, or simply a little cash cushion for the next vacation.
Analogous to this division into growth and value, high dividend stocks can also be divided into dividend growth and dividend yield.
#1: Dividend growth strategy
“The dividend growth strategy is the most impressive way to participate in compound interest - and also the most predictable.” AlleAktien
Dividend growth: These companies are growth stocks or growth stocks that are slowly transforming into value stocks. They are in an early phase of their life. Because the company is still growing, it reinvests much of its profits in growth. However, it pays a dividend, which is usually rather small and growing at a fast pace. One usually speaks of a dividend growth stock from a dividend growth of 10% per year.
With dividend growth, one maximizes the dividend of the future. Dividend growth investors focus on shares with a lower dividend yield, which, however, grows rapidly. The dividend growth ensures that within a few years you still get an attractive dividend. The strategy is particularly popular with investors who still have a few years until retirement.
Examples of shares with high dividend growth :
#2: Dividend Income Strategy
“The dividend income strategy is especially fun if you have six-figure assets. You quickly have 500 and more euros per month together and can afford one or two luxuries in life.” AlleAktien
Dividend income: These companies are value stocks. They are in a late phase of their life. Due to low reinvestment, there is a lot of money available for dividends and share buybacks. The dividend yield is mostly higher and only growing at a slow pace.
However, this subdivision should not be understood too strictly. There is no uniform subdivision. For me, the limit is around 10% dividend growth per year. Other investors set it lower or even higher. It's just important to know that not every dividend stock starts with a high dividend yield.
Dividend income is about enjoying the here and now. Many investors want a dividend to generate monthly cash flow. These investors place more emphasis on higher yield and less on dividend growth. It's a case of "cash is king." Again, the quality of the company is critical to ensure that the strategy produces steady returns over decades.
Examples of shares with a high dividend yield :
Danger with high dividend yield?
Often, a high dividend yield can be justified by the fact that the share price has fallen sharply in the past. As a rough rule of thumb, it can be said that with a dividend yield of more than 5% at the current price, the company must be looked at particularly closely before an investment is made here.
A high dividend yield alone is not a sign of quality and must always be considered in the overall context of all other key figures. The question "Which company pays the highest dividend?" should never be the sole reason for a purchase decision here.
The shares with the highest dividend in Germany
Germany has some dividend payers that can keep up with the international competition. After all, 35 of the 40 DAX companies pay a dividend. However, the five non-payers include younger companies such as Delivery Hero und Hellofresh (both founded in 2011). But not only DAX corporations pay an attractive dividend, other German companies that may not be known to everyone also pay dividend yields that are worth looking at.
The DAX company with the highest dividend yield is the world's largest chemical group by sales BASF.BASF currently pays a dividend yield of 5.32% and for the last 14 years it has always been above 3%. Second place goes to the Munich-based insurance company Allianz with a dividend yield of 4.73%. Allianz is also an extremely popular dividend payer in the AlleAktien community and made it to No. 1 among the dividend stocks held by German private investors in the second quarter of 2022. Also making it onto the podium is the energy group E.ON from the Ruhr region. The current dividend yield is 4.26%.
The pharmaceutical company Bayer from Leverkusen pays its shareholders a very good dividend yield of 4%. The reinsurance company pays only slightly less, at 3.76%. Munich Re (also known as Munich RE). Europe's largest telecommunications company, the Deutsche Telekom, pays a solid dividend yield of 3.61%. Vonovia, a real estate group and, since 2020, a member of the EURO STOXX 50 , pays its shareholders a dividend yield of 3.29%.
Four other German groups that are not in the DAX and therefore fly under the radar are the online sports betting and gaming group bet-at-home.com (14.74%), the telecommunications company Freenet (7.40%), the construction group Hochtief (5.58%) and the asset manager DWS Group (4.80%), the to Deutsche Bank heard
Standard company with high dividend from Europe
In Europe, there are some world-renowned companies that pay high dividends, but there are also companies that most investors have not heard of.
From Great Britain come the dividend companies British American Tobacco (BAT), Imperial Brands,Rio Tinto und Unilever.BAT und Imperial Brands are among the five largest tobacco companies and sell their products worldwide. Imperial Brands currently pays a dividend yield of 8.89 % and BAT one of 8.52 %. Rio Tinto is one of the three largest mining companies in the world and pays a dividend yield of 11.01%. However, was Rio Tinto's Dividend yield not always so high. Only since 2019 has the dividend increased significantly. The dividend aristocrat Unilever is one of the world's largest manufacturers of consumer goods such as food, cosmetics, household products. Unilever’s Dividend yield is 3.80%. All four companies pay their dividends on a quarterly basis instead of annually, as is the case in Germany usual.
There are also some exciting dividend companies in Southern Europe. The mineral oil and energy group Eni (IT0003132476) is from Italy and pays its shareholders a dividend of 5.28%. The two Spanish companies Red Eléctrica de España (ES0173093024) (REE) and Telefónica (ES0178430E18) have dividend yields of 5.57% and 9.26%, respectively. REE (ES0173093024) is the national transmission system operator in Spain for the operation of the extra-high voltage electrical network, in addition, is REE (ES0173093024) also operates in Peru and Chile. The telecommunications company. Telefónica (ES0178430E18) operates mainly in Europe, but also in the fast-growing Latin American market.
Our neighboring countries of Switzerland and France can also boast world-renowned dividend companies. For example, the world's largest food company from Switzerland pays, Nestlé (CH0038863350), a dividend yield of 2.52%. The Swiss Novartis (CH0012005267) pays 3.92% in dividends to its shareholders and reinsurance company Swiss Re (CH0126881561) pays 7.02%. The pharmaceutical company, which originated in France. Sanofi (FR0000120578) pays a dividend yield of 3.63%. The AXA Group (FR0000120628), a French insurance company, pays 5.59% in dividend. The third company from France is the petroleum and gas group. Total (FR0000120271) with a dividend yield of 6.07%.
A dividend company from Northern Europe is also worth mentioning. The Swedish car manufacturer Volvo (SE0000115446 )(Share B) gives its shareholders 7.30% in dividends.
Companies with high dividends from the Asia-Pacific region
The financial service provider DBS aus Singapore is a familiar name to many investors; it is regarded as a solid group with secure income streams and pays a dividend of 3.16%. Another financial company is the investment bank Macquarie Group from Australia, which offers a dividend yield of 3.03%. Also from Australia is the mining company Fortescue Metals Group which pays a very attractive dividend of 24.54% to its shareholders.
JB Hi-Fi, an Australian consumer electronics and appliance company, is distributing 5.70% to its shareholders. Taiwan Semiconductor Manufacturing Company (TSMC) pays a dividend of only 1.54%, however the Taiwanese company is one of the top 3 semiconductor manufacturers in the world and the technology giant. Apple is the main customer. Three dividend payers from Japan are the insurance company Tokyo Marine Holdings (3.97%), the tobacco, food and pharmaceutical company Japan Tobacco (6.10%) and the construction company Haseko Corporation (4.75%).
Companies with high dividends from the dividend stronghold of America
The USA is known for its dividend stocks and a proud 65 companies of the S&P 500 are dividend aristocrats. In addition, over 400 corporations in the S&P 500 a dividend to its shareholders.
From the eleven sectors, Eulerpool has searched for the stocks with the highest dividends. The top performer is the utilities sector with 12 dividend stocks and the highest dividend yield offers PPL Corporation with 5.77%. Both the consumer staples sector and the financial sector have nine companies with a dividend yield of over 3%. Altria Group (8.04%) and The Western Union (5.21%) have the highest dividend yield in their respective sectors. From the energy sector is Children Morgan the top performer with a dividend yield of 6.42%, and from the real estate sector Iron Mountain with 5.20 %. Both sectors have eight high dividend companies. AbbVie from the healthcare sector pays its shareholders a dividend of 4.88%. From the telecommunications sector AT&T the share with the highest dividend yield of 8.42%. In the consumer goods sector, it is Leggett & Platt with a dividend of 3.87%. The industrial giant Lockheed Martin pays a dividend yield of 3.31%. The fast-growing technology sector can be supported with the company's IBM (5.43%) score.