2020, the year of coronavirus, not only brought record-breaking upward and downward movements on equity markets, but also saw the operating business of many companies go on a rollercoaster ride. This could not fail to have an impact on profit distributions. While the proportion of dividend payers in the STOXX Europe 600 had hovered continuously around the 90% mark since 2012, in 2020 the rate plunged to about 75%. The SMI groups showed greater stability, slipping from 100% to 95% in the same period. Following the huge cuts in dividends around the world, there are clear signs of recovery this year. By the second quarter 84% of companies had already increased their payouts or kept them unchanged on the previous year. The British investment company Janus Henderson expects dividends globally to return to their pre-pandemic high of USDtn 1.39 in the next twelve months.
Some companies such as Nestlé and Roche, which are among the elite class of dividend aristocrats, even raised their profit shares during the coronavirus crisis. The world's largest food producer has now increased its dividend for 26 years in a row, while for drugs giant Roche the unbroken run is as long as 34 years. It is not only the big groups that are offering persuasively attractive payouts, though: mid-sized players such as Emmi and BKW are also giving shareholders something to cheer. The Lucerne milk processor, for instance, ramped its dividend for the last financial year up by another franc to CHF 13 per share. Although the dividend yield of BKW currently stands at "only" around 2.30%, the energy company has delivered convincing dividend growth of 10% p.a. over the last three years.
The financial institutions in the two blue-chip SMI and DAX indices are known for their high interest rates, with Credit Suisse, for example, yielding 6.9%. There is even more on offer from the life assurers: at 8.1%, the shares of reinsurer Swiss Re boast the highest dividend yield in the SMI. By comparison, the average interest rate in the SMI is currently 2.7%. Strong performers in the DAX include Allianz and Münchener Rück, with yields on the other side of the 4% mark. As these industries are subject to particularly strong regulation, however, and the SNB and ECB, for instance, urged caution with regard to payouts during the coronavirus crisis, these companies no longer meet the requirements set out by Christian W. Röhl and so are no longer included in the indices. Not only has the strategy of the DividendenAdel Schweiz Index resulted in it outperforming the market as a whole since the start of 2020, but with growth of 10.3% the dividend barometer is also well ahead of the SMI this year too. To keep the DividendenAdel indices always up to date, its selection is put under the microscope at regular intervals, with the effects of coronavirus making their presence felt here as well. At the beginning of October the time came to adjust the indices again. The DividendenAdel Schweiz Index was reduced from 15 members to 10, with those no longer in the line-up including Allreal, Bâloise, Forbo, Helvetia, Partners Group, PSP Swiss Property and Valiant. New on board are Also Holding and BKW. There were changes in the DividendenAdel Deutschland Index, too: Allianz, BASF, Merck, Münchener Rück and Siemens are longer in, while alstria office REIT-AG, Cancom, Deutsche Post, Fresenius Medical Care and TAG Immobilien were added.
As the team of experts around Christian W. Röhl apply decades of stock market experience, clever arithmetic acrobatics and professional know-how to the yearly selection of members, investors can sit back and relax. The tracker certificates from Leonteq offer a quick and low-cost way of bringing the highly promising dividend strategy into a portfolio. Denominated in EUR and CHF, the participation products track the DividendenAdel Schweiz Index completely, less a fee of 0.95% p.a. Since the index is a net total return variant, the payouts of the members flow net back into the benchmark.
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