DAX investors are in for a very promising dividend season. The 24 DAX companies are expected to announce a dividend increase for FY2017. The total dividend sum of the DAX is set to improve by a substantial 11 percent y/y to a new all-time high of EUR35.3 billion, driven by synchronous global GDP growth, Commerzbank reported.
The share buybacks of five DAX companies could total EUR5 billion in 2018, whereas four companies pay scrip dividends. The FY2017 dividend yield of 2.7 percent remains attractive compared to government and corporate bond yields. In our scenario, rising dividends and attractive dividend yields remain key bull trends.
Five companies are currently performing share buyback programs with an expected total volume of EUR5 billion in 2018: Allianz, Dt. Boerse, Munich Re, SAP and Siemens. And four companies have been paying scrip dividends: Dt. Telekom (acceptance rate was 40 percent for FY2016 dividend), E.ON (acceptance rate 30 percent), Dt. Lufthansa (acceptance rate 15 percent) and Vonovia (acceptance rate 50 percent).
"The auto sector could pay 24.9 percent of FY2017 DAX dividends (24.0 percent in FY2016), the insurance sector 13.6 percent (FY2016: 15.1 percent) and the utilities sector 4.5 percent (FY2016: 1.4 percent). At a current market cap of EUR1,300 billion for the DAX, EUR35.3 bilion dividends correspond to an expected FY2017 dividend yield of 2.7 percent. 14 of the 30 DAX companies still offer an expected FY2017 dividend yield of more than 2.5 percent," the report added.
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