3 German Dividend Stocks With Yields Up To 5.4% (2024)

As global markets react to economic data and geopolitical events, the German DAX index has experienced a notable decline, reflecting broader concerns about growth. Despite these challenges, dividend stocks remain an attractive option for investors seeking steady income in uncertain times. In this article, we will explore three German dividend stocks that offer yields up to 5.4%, providing potential stability and income amid market volatility.

Top 10 Dividend Stocks In Germany

Click here to see the full list of 31 stocks from our Top German Dividend Stocks screener.

Below we spotlight a couple of our favorites from our exclusive screener.

EDAG Engineering Group

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: EDAG Engineering Group AG develops vehicles, derivatives, modules, and production facilities for the automotive and commercial vehicle industries globally, with a market cap of €253.75 million.

Operations: EDAG Engineering Group AG generates revenue from three primary segments: Vehicle Engineering (€488.93 million), Production Solutions (€268.86 million), and Electrics/Electronics (€111.45 million).

Dividend Yield: 5.4%

EDAG Engineering Group offers a mixed picture for dividend investors. The stock's Price-To-Earnings ratio (9.2x) is attractive compared to the German market average (16.9x), and its dividend yield (5.42%) is in the top 25% of German payers. Dividends are well covered by earnings and cash flows, with payout ratios at 49.7% and 46.4%, respectively. However, ED4's dividends have been unreliable over the past eight years, showing volatility and occasional drops exceeding 20%.

• Get an in-depth perspective on EDAG Engineering Group's performance by reading our dividend report here.

• Insights from our recent valuation report point to the potential overvaluation of EDAG Engineering Group shares in the market.

Heidelberg Materials

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Heidelberg Materials AG, with a market cap of €15.88 billion, produces and distributes cement, aggregates, ready-mixed concrete, and asphalt globally through its subsidiaries.

Operations: Heidelberg Materials AG's revenue segments include €10.90 billion from cement, €4.92 billion from aggregates, and €5.71 billion from ready-mixed concrete and asphalt.

Dividend Yield: 3.4%

Heidelberg Materials' dividend payments have been volatile over the past decade but show a recent increase, with a proposed payout of €3 per share, up 15% from 2022. The dividends are well-covered by earnings (29.6% payout ratio) and cash flows (27.4% cash payout ratio). Despite trading at nearly 60% below estimated fair value and offering a lower yield (3.4%) than top German payers, the stock remains attractive for its coverage ratios and growth potential in earnings.

• Dive into the specifics of Heidelberg Materials here with our thorough dividend report.

• Our valuation report unveils the possibility Heidelberg Materials' shares may be trading at a discount.

Deutsche Lufthansa

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Deutsche Lufthansa AG operates as a global aviation company with a market cap of approximately €6.67 billion.

Operations: Deutsche Lufthansa AG generates revenue primarily from Passenger Airlines (€29.04 billion), Maintenance, Repair and Overhaul Services (MRO) (€7.06 billion), Logistics (€2.93 billion), and Additional Businesses and Group Functions (€1.01 billion).

Dividend Yield: 5.4%

Deutsche Lufthansa's dividend payments have been volatile and unreliable over the past decade. Recent earnings reports show a significant drop in net income for Q2 2024 to €469 million from €881 million a year ago, impacting dividend stability. Despite this, the company maintains a reasonable cash payout ratio of 60.9%, suggesting dividends are covered by cash flows. However, profit margins have decreased to 3.3% from 5.1% last year, raising concerns about future payouts' sustainability.

• Navigate through the intricacies of Deutsche Lufthansa with our comprehensive dividend report here.

• Our valuation report here indicates Deutsche Lufthansa may be undervalued.

Turning Ideas Into Actions

• Get an in-depth perspective on all 31 Top German Dividend Stocks by using our screener here.

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Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include XTRA:ED4 XTRA:HEI and XTRA:LHA.

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