We recently published a list of 10 Best German Dividend Stocks To Buy Now. In this article, we are going to take a look at where Bayerische Motoren Werke Aktiengesellschaft (XETRA:BMW.DE) stands against other best German dividend stocks to buy now.
At the end of January this year, Germany’s government significantly slashed its GDP growth forecast for 2025 to just 0.3% from the prior estimate of 1.1%. German economy minister Robert Habeck expressed concern, highlighting stagnation despite some positive signs like rising credit demand. This revision is in line with projections from other institutions like the IMF and Bundesbank. Germany’s economy shrank by 0.2% in 2024, following a 0.3% decline in 2023. The government pointed to stagnant growth plans, geopolitical uncertainties, and structural issues such as labor shortages and weak investment. While the country faces challenges, there is hope for better growth by 2026.
Similarly, Germany’s Ifo Institute has also cut its 2025 growth forecast to just 0.2%, pointing to sluggish consumer spending and hesitancy among companies to invest. While a slight improvement to 0.8% is expected next year, the outlook remains shaky due to political uncertainty and possible US trade policies. Despite some recovery in purchasing power, consumer confidence is still low, and industries are feeling the pressure from weak demand and growing global competition. Ifo also warned that US tariffs on European goods could pose a serious threat to German exports.
According to the Association of German Banks, a stronger recovery is not likely until 2026, when growth could reach 1.4%. The outlook has worsened, especially after the U.S. announced a 25% tariff on imported cars, causing a major blow to German automakers. Corporate investment is also expected to stay sluggish, with even the projected 3.5% increase in 2026 falling short of previous post-crisis rebounds. Still, experts say that strong reforms and a more competitive tax policy from the next government could help turn things around sooner.
Jari Stehn, Chief European Economist at Goldman Sachs Research, shed some light on the German economy and commented back in December 2024:
“Even though industrial production is down significantly over the last few years, the amount of value added has actually been much more stable. German companies have been able to respond by moving out of relatively low-margin production in chemicals or paper, and so on, into higher value production. I think the way forward essentially is for German companies to continue to do that.”
With that outlook in mind, individuals who want to diversify their portfolios and add income-generating stocks to their investment mix can invest in some stable German dividend stocks.
Our Methodology
For this article, we used the iShares DivDAX® UCITS ETF (DE) to filter out German dividend stocks. The ETF aims to replicate the performance of an index comprising 15 high dividend yield stocks selected from the 30 largest and most actively traded companies on the Frankfurt Stock Exchange’s Prime Standard segment. From this fund, we focused on picking prominent stocks with positive investor sentiment, stable yields, and strong dividend policies. The list below is ranked in ascending order of dividend yield as of April 21.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Bayerische Motoren Werke Aktiengesellschaft (XETRA:BMW.DE)
Dividend Yield as of April 21: 6.12%
Bayerische Motoren Werke Aktiengesellschaft (XETRA:BMW.DE) is a well-known German company that designs and produces cars and motorcycles under popular brands like BMW, MINI, and Rolls-Royce. It also operates BMW Motorrad for motorcycles and special-purpose vehicles. BMW is one of the best German dividend stocks to buy. In 2024, BMW ended the year with €7.5 billion in pre-tax earnings and €4.9 billion in free cash flow, despite investing €18.2 billion in R&D and capital projects. Strategic inventory reductions in Q4 helped boost cash flow. The company’s financial position remains solid, with automotive net financial assets holding steady at €46 billion.
Bayerische Motoren Werke Aktiengesellschaft (XETRA:BMW.DE) proposed a dividend of €4.30 per common share and €4.32 per preferred share, totaling €2.7 billion, putting the payout ratio at 36.7%, comfortably within its target range. BMW also fast-tracked its €2 billion share buyback program, completing it six months early and reducing its total shares by over 7%. At the next AGM, the company plans to seek approval for a new five-year share buyback authorization of up to 10% of the share capital.
In Q1 2025, Bayerische Motoren Werke Aktiengesellschaft (XETRA:BMW.DE) delivered 586,000 vehicles globally, down 1.4% due to weak demand in China, but the company experienced growth in Europe and the US, up 6.2% and 4%, respectively. EV sales climbed 32.4% to over 109,000 units, with Europe up 64%. BMW is on track to hit 3 million electrified and 1.5 million fully electric vehicles sold globally this year.
Overall, BMW.DE ranks 3rd on our list of best German dividend stocks to buy now. 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 BMW.DE 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
