Effect of the corona crisis on the dividend yield
In times of the corona crisis, the question arises of how to invest your money. A good alternative are stocks with high dividend payouts. Anyone looking for stocks with good future prospects, solid balance sheets and an appropriate payout ratio among the “high-dividend stocks” will not be disappointed even in times of the corona crisis.
Of course, one must also assume that individual companies will act cautiously due to the current situation and cut or even cancel the dividend. However, one cannot assume a failure on a broad front.
Ultimately, it depends on the operational situation of the respective company. If the management decides to cancel the dividend for a year, for example, and the company emerges stronger from the crisis, this is not a disadvantage. This means that shareholders can participate in economic success again after the recovery.
Return on shares = price gain + dividend
The return on a share is made up of price gains and the dividend. In contrast to the price gains that could be realized by selling a share, the dividend of German shares is automatically distributed once a year. In the case of foreign companies, the dividend can also be paid quarterly or every six months. High dividend stocks provide regular income without having to sell them. In order to realize price gains, the share must be sold.
Calculation of the dividend yield
The dividend yield sets the dividend in relation to the share price. To calculate the dividend yield, the dividend per share is multiplied by 100 and divided by the share price.
Here is an example: RWE pays a dividend of 0.80 euros per share. At a share price of 33.61 euros, the dividend yield is + 2.38%.
Top 10 stocks with the highest dividend yield
The 10 German stocks with the highest dividend yield are listed here (calculated on October 16, 2020).
- 39,95% – exceed group (Rating: 0 points) * 1
- 17,98% – TUI (Rating: -3 points) * 2
- 12,50% – DEMIRE Deutsche Mittelstand Real Estate (Rating: +3 points)
- 10,00% – Mutares (Rating: +2 points)
- 9,62% – TTL Beteiligungs- und Grundbesitz-AG (Rating: +3 points)
- 9,09% – Gateway Real Estate (Rating: +3 points)
- 8,47% – HIGH LOW (Rating: -6 points)
- 8,23% – Metro st (Rating: 0 points)
- 7,65% – Schaeffler (Rating: +1 point)
- 7,59% – Telefonica Germany (Rating: -2 points)
Note: The dividend that will be voted on for the 2020 Annual General Meeting season is used as the reference value for calculating the dividend yield. It is the dividend for the 2019 financial year.
* 1 The exceed Group has sold a substantial part of its operating business and paid out the profit as a special dividend.
* 2 TUI is particularly affected by the corona crisis. In order to get its predicament under control, the federal government has approved a bridging loan of 1.8 billion euros. However, the loan is subject to the condition that TUI may not distribute any dividends during the term of the loan.
How do you find stocks with solid balance sheet numbers?
The “rating” in brackets behind the share makes a statement about how the company's balance sheet figures of TransparentShare be rated. The rating is calculated from the sum of 12 key figures, such as return on equity, profit margin, price-earnings ratio.
Each key figure can have the value +1, 0 or -1. A share recommended for purchase must have a total of at least 4 points (DAX) or 6 points (MDAX, SDAX, CDAX).
The method of determining the key figures is based on the Levermann method, which Susan Levermann described in her book "Der entspannte Weg zum Reichtum (The relaxed way to wealth)".
You can find more information on how the stock valuation of TransparentShare works at: How does TransparentShare work?
UBM Development - share with high dividend yield and best rating of the key figures
UBM Development has with one Dividend yield of + 7.43% narrowly missed entry into the top 10 list. TransparentShare has given the share a very good rating of +5 points.
Positive key figures from UBM Development:
- Equity ratio: + 35.13%
- Profit margin: + 29,53%
- Current price / earnings ratio: 11.63
- Price / earnings ratio over 5 years: 6.86
- Expected earnings growth: + 21,43%
- Response to quarterly numbers: + 6.40%
- Course-to-book ratio: 0.5
In summary, not every stock with a high return is a buy recommendation. The overall picture of the company is decisive here.
We wish you every success in trading stocks!
Your TransparentShare team