Anyone who invests in German companies can look forward to record dividends in 2023. According to calculations by Dekabank, the top stock exchange groups in Germany are likely to distribute more money this year than ever before.
According to Dekabank, the 40 companies in the German stock index (Dax) will together pay out almost 55 billion euros to their shareholders in 2023. The 50 companies listed in the MDax are also likely to further increase their distributions compared to 2022. This is the result of the bank’s calculations based on the companies’ dividend forecasts for the 2022 financial year.
The calculations say there have never been such lavish Dax dividends. Special dividends, such as those paid by Volkswagen for the successful IPO of subsidiary Porsche, are not included in Dekabank’s statements. According to the calculations, the companies in the first German stock exchange league will pay out around 3.6 billion euros more dividends than a year earlier. If one calculates out the special dividend from VW, there is an increase in the profit distribution for 29 Dax companies compared to the previous year. Five companies therefore have less dividends and six have the same dividends.
Joachim Schallmayer from Deka classifies the figures in a statement from the savings bank securities house: “Despite the pandemic, which has led to considerable distortions in the production chains of the global economy, companies have come through the crises surprisingly well and have increased their earnings,” he said the capital market expert. The Dax companies would have made more money in 2022 than ever before. It is positive that profits have been increasing faster than distributions since 2019.
According to Schallmayer, the war of aggression in Ukraine is having a negative impact, leading to planning uncertainty and higher costs. “However, stable demand combined with limited supply leads to positive margin effects.” In addition, there has been a rather restrained dividend policy in the past two years. “Contrary to the uncertain recession environment, it is only logical for companies to let their shareholders participate appropriately in the company’s past success,” continued Schallmayer. At 37.2 percent, the payout ratio is still below the long-term average of 41 percent.
A look at the regional differences also shows that companies headquartered in Bavaria pay out a total of more than 18 billion euros to their shareholders. “Bavaria will be the most profitable region in Germany in 2023,” says Schallmayer. North Rhine-Westphalia follows in second place with 14.8 billion euros. Baden-Württemberg took third place. The companies located there will pay out around 11 billion euros.
The companies in the MDax will also pay out around 7.5 billion euros for the 2022 financial year, a total of 12.3 percent higher than for the previous financial year. In total, the 90 companies listed in the Dax and MDax are paying out around EUR 62.5 billion.
Overall, according to the bank, the DAX 40 companies are listed at the current level with a dividend yield of 3.6 percent. the companies listed in the MDax traded at 2.9 percent. “The long-term business prospects and thus also the dividend prospects are stable,” says Schallmayer. Despite the crisis, the companies’ ability to pay dividends is not in danger.