Pay-out Party

The Year of the Dividend

Golden eggs Getty
Dividends, the new goose that laid the golden eggs.
  • Why it matters

    Why it matters

    In a world of record-low interest rates, stocks that pay high, consistent dividends are rewarding investors.

  • Facts

    Facts

    • Germany’s blue-chip DAX index has hit a record high of about 11,000 points.
    • Last year, German listed companies distributed a record $1.17 trillion (€880 billion) in dividends to shareholders.
    • Insurance giant Allianz paid the highest dividends of any DAX company, estimated at more than €3 billion.
  • Audio

    Audio

  • Pdf

The world is so paradoxical these days, with an unprecedented number of crises offset by huge financial opportunities.

As the West struggles to find a peaceful solution in Ukraine, Europeans are doing everything possible to prevent Greece from exiting the euro zone. At the same time, the global community is battling terrorist organizations such as Al-Qaeda, Boko Haram and the group calling itself Islamic State, or IS. The world, in this context, appears to be a fearful place with a grim future.

Meanwhile, opportunity abounds, with financial markets unimpressed by terror and war. The German DAX blue-chip index  keeps breaking new records and is currently above 11,000 points. In this world, the future looks rosier than ever.

Yet these contrarian worlds, one of fear and one of opportunity, are closely connected. It was the glut of money and the European Central Bank’s zero interest-rate policy that drove the markets to record highs. And the weak euro, another result of relaxed monetary policy, is like a free economic stimulus program for businesses.

The central bank’s near-zero interest rates have made checking accounts, government bonds and savings accounts extremely unattractive to investors. Stocks, on the other hand, have become the best alternative at the moment, and not just because of rising share prices.

In these uncertain times, investors gain security through the dividends that companies distribute to shareholders each year.

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