The dividend season is turning out better than analysts' forecasts, and shareholders can look forward to generous payouts. Twenty three of the forty Dax companies are increasing their dividends, while only five companies, including the three car manufacturers VW, BMW and Mercedes-Benz, are cutting them.

According to LBBW's calculations, the total payouts from the Dax are likely to increase slightly from 53.9 billion euros to 56.0 billion euros.

Dividends account for a significant proportion of performance on the German and European stock markets in particular. This is reflected not least in the high long-term difference between the conventional Dax, which includes dividends as a performance index, and the price Dax. However, the power of dividends also works for individual stocks. Companies that manage to pay stable and steadily rising dividends over many years generally show an above-average performance. The prices of these dividend aristocrats also fluctuate significantly less than the prices of other shares, as long as the payout offers a reasonably attractive dividend yield. In general, a high and stable dividend is a sign of a stock's quality. The good news for investors on the German stock market is that there are a number of such top stocks in this country, such as Allianz, Deutsche Telekom, Munich Re and Siemens.

However, even long-standing dividend aristocrats can sometimes disappoint. For many years, BASF presented its shares to fund managers as being less prone to cyclicality, and paying a stable dividend. Now earnings have collapsed, not least due to the change in the general conditions for the chemical company. BASF has cut its dividend from 3.40 euros to 2.25 euros.

It is not only BASF that is no longer an aristocrat – Volkswagen has also shifted into reverse gear. In recent years, the auto maker pleased shareholders with stable or rising dividends. Now Volkswagen has also cut its dividend in view of declining profits and the enormous challenges facing the group. Preference shareholders will only receive a payout of 6.36 euros per share after 9.06 euros per share in the previous year.

Hamborner Reit, a member of the SDax, also disappointed, after reporting an ad hoc adjustment to its dividend strategy a few days ago. For years, Hamborner was known for stable or slightly increasing dividends. Now the group is lowering the payout ratio to a maximum of 60% to 70% of the operating result generated in the respective financial year. Over the past ten years, the company has distributed an average of around 76% of the annual operating result. For the 2024 financial year, the Executive Board and Supervisory Board will now propose a dividend of 48 cents per share at the Annual General Meeting on 26 June, the same as in the previous year.

The fact that there are fewer and fewer dividend aristocrats shows how high the quality of the remaining stocks are. Insurance companies in particular impress with high and rising profits, which allow for corresponding dividends. Allianz changed its dividend policy last year and is thus responding more closely to the wishes of its numerous retail investors. The insurance group has significantly increased its dividend from 13.80 to 15.40 euros per share. Shareholders are already looking forward to the generous dividend, which will be paid out after the Annual General Meeting on 23 May. The dividend yield is currently an impressive 4.5%, which is significantly more than is paid on a Tagesgeld account.

Munich Re, the world's largest reinsurer, is also one of the top aristocrats. The increase in the dividend from 15 to 20 euros was higher than expected, and shows how well the insurance giant is currently doing. The Annual General Meeting will take place on 20 May. The dividend yield is currently a very respectable 3.4%. Among the insurers, Talanx, which is listed in the MDax, is also one of the dividend aristocrats. Shareholders can look forward to a dividend increase from 2.35 to 2.70 euros per share after the Annual General Meeting on 8 May.

The shares of Deutsche Telekom and Siemens have proven to be real wealth creators in recent years. Here, steadily rising profits and cash flows have led to higher dividends in each case. Siemens recently increased its dividend per share from 4.70 to 5.20 euros, while Deutsche Telekom raised its dividend from 77 cents to a whopping 90 cents. At 2.8% and 2.9%, Siemens and Telekom both offer very respectable dividend yields.

Although Deutsche Post is a cyclical stock, it has always paid stable dividends in recent years. A dividend of 1.85 euros per share will again be proposed at the Annual General Meeting on 22 May. The dividend yield is an impressive 5.1%. However, the question naturally arises as to whether Deutsche Post will be able to maintain this dividend level in the long term.

DWS Group, which has just been promoted from the SDax to the MDax, also offers an impressive dividend yield of 5.1%. The Annual General Meeting is on 13 June. The parent company Deutsche Bank is likely to ensure that DWS continues to pay a substantial dividend in the future. DWS will then remain one of the rare aristocrats on the German stock market.