10 Best German Dividend Stocks To Buy Now

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1. Mercedes-Benz Group AG (XETRA:MBG.DE)

Dividend Yield as of April 21: 8.56%

Mercedes-Benz Group AG (XETRA:MBG.DE) tops our list of the best German dividend stocks to buy. Based in Stuttgart, Germany, Mercedes-Benz is a global automotive company specializing in premium cars, vans, and mobility services. It operates under brands like Mercedes-Benz, AMG, Maybach, and G-Class.

On April 17, RBC Capital Markets maintained an Outperform rating on Mercedes-Benz Group AG (XETRA:MBG.DE) but trimmed the price target from €79 to €73. RBC Capital expects tariffs to lower Mercedes-Benz’s EBIT by 8% and has cut its price target. Despite this, the stock is considered undervalued, with a potential 24% upside. The company’s strong shareholder returns of 13-14% via dividends and buybacks support RBC’s Outperform rating.

Mercedes-Benz Group AG (XETRA:MBG.DE) announced on April 3 that it is investing several hundred million euros to build a new eco-friendly Next Generation Paintshop at its Sindelfingen site, set to open in 2028. The new facility will run entirely on renewable energy, cut energy use by half, and recycle water and materials. It is being built in partnership with Dürr Systems and will be equipped with smart tech like AI monitoring and a digital twin to speed up construction and ramp-up.

In 2024, Mercedes-Benz Cars sold 1.98 million vehicles, matching the previous year, with strong Q4 sales driven by demand in Germany, China, and the United States. Top-End model sales rose 34% in Q4, led by the G-Class and AMG models, but annual sales fell slightly to 281,500 units due to weak EV demand and challenges in China. The S-Class maintained a 50% market share in its segment. Core segment sales grew 6% to 1.17 million units, supported by strong E-Class and GLC demand.

Overall, Mercedes-Benz Group AG (XETRA:MBG.DE) ranks first on our list of the best German dividend stocks. While we acknowledge the potential of German stocks as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than MBG but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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