Thursday, May 24, 2007

German Stocks with Dividends

Because of the recent news about Daimler Chrysler (DCX) selling off its Chrysler division, many investors have turned their attention to Germany. Here is some financial trivia about Germany:
1. It is the world's largest exporter of goods.
2. It has the largest population among the EU member countries.
3. It has the largest economy in Europe.
4. It has the world's third largest GDP economy.
5. It holds the largest capacity of wind power.
6. It is the largest exporter of wind turbines.
7. It is the world’s fifth largest consumer of energy.
8. They are phasing out out all nuclear power plants by 2021.
9. The first Nobel prize in physics was won by a German for the discovery of X-Rays.
10. According to the CIA Factbook, it is ranked fifth in the world in terms of purchasing power parity.

Fortunately, there are several German stocks which, in addition to providing growth potential, also provide income through dividends. Please be advised that there are tax withholding issues with regards to dividends from foreign stocks.

Of all the German stocks which have American Depository Receipts [ADR's] that trade in the U.S., Deutsche Telekom AG (DT) has the highest yield, paying a generous 4.5%. They have a P/E of 22.7 and a PEG of 2. The company recently reported an earnings drop of about 58% on a revenue increase of slightly over 4%. Earnings were down due to significant cancellations of landlines. In spite of the earnings drop, the shares have been on a tear for the last few days.

Second highest in terms of yield is a relatively unknown name in the U.S. Pfeiffer Vacuum Technology AG (PV) is a German company which manufactures and markets vacuum and pump technology products. These vacuum products are used for analytical uses, not to vacuum your carpet. They have a P/E of 21.5 and a yield of 2.6%.Latest quarterly earnings were up 23% on a revenue increase of 7%.

BASF AG (BF) is a large chemical and plastics manufacturer with a similar yield. They have a P/E of 13.7 and the quarterly earnings growth was up about 9%.

Paying a yield of 2.3% is the electric and gas utility, E.ON AG (EON). Not only do they provide power to central Europe and United Kingdom, but they also have power operations in the Midwestern United States. It has a P/E of 12.6 and a PEG of 2.3. Quarterly earnings year over year were up a substantial 50% on quarterly revenue growth of 6%.

Other dividend payers which have yields of less than 2% are as follows:

Allianz (AZ) The insurance company. 1.9%

Daimler Chrysler (DCX) 1.7%

Deutsche Bank AG (DB) 1.6%

Bayer (BAY) The chemical and pharmaceutical company that makes Bayer aspirin. 1.5%

Fresenius Medical Care (FMS) 1.3%

Siemens (SI)The electronics conglomerate. 1.2%

SAP (SAP) The software company that competes with Oracle. 1.1%

EPCOS (EPC) An electronics company. 0.9%

By the way, if you are looking for a great resource for information on foreign stocks that have ADR's that trade in the United States, check out

Author owns DCX, DT, AZ, DCX, BAY and SAP.

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