5 Best German Dividend Stocks to Buy

4. BASF SE (OTC:BASFY)

Forward Dividend Yield: 6.95%

BASF SE (OTC:BASFY) is a Ludwigshafen, Germany-based chemical company. The biggest chemical company in the world houses 111,000 employees and has a business portfolio comprising six segments.

On October 28, Tim Jones at Deutsche Bank upgraded BASF SE (OTC:BASFY) stock from a Hold to a Buy rating and increased the target price from $57.77 to $63.02. Four shares of BASF SE listed on the OTC market in the US is equivalent to one share listed on the German stock exchange. This target price reflects a potential upside of around 25% from the closing price as of December 8. The analyst made the adjustment following meetings with the CFO and head of investor relations. Jones thinks that the current stock price does not do justice to the overall value of the company as it is trading around the same valuation as at the time of the Great Financial Crisis of 2008. The stock provides significant valuation support to investors.

Here’s what Tweedy, Browne Company LLC said about BASF SE (OTC:BASFY) in its Q4 2021 investor letter:

“With respect to ESG issues that arose as a part of our research process during the quarter, two of the Funds’ portfolio holdings took notable steps to address environmental sustainability. In addition, we engaged with two other companies regarding capital allocation. BASF, the large German chemical company, made a decision to carve out a business related to internal combustion engines and began investing significant amounts to develop a battery business. The company also committed to carbon reduction goals of net zero emissions by 2050. The CEO told us of the importance of this battery initiative in helping customers to meet their commitments to electromobility, but indicated the company will only make investments that have a visible return, making the company’s sustainability strategy more flexible and less risky in terms of profitability. In our view, this would appear to be a financially prudent step in reducing the company’s transition risk as the world continues to move toward a lower carbon economy, and should not compromise the compound of the company’s intrinsic value.”