Top 10 German dividend stocks, ranked by income quality

Only German-registered operating companies that actually pay are considered: dividends in at least three different calendar years within the last five years, and a trailing twelve-month yield between 1% and 12%. That leaves 90 companies out of 116 payers we can measure on Xetra. Each one is scored on four things: the income lens (40%), which blends the yield and the length of the payment record against every share on the exchange; the risk lens (25%), which rewards a steady price; trading volume (20%); and trend (15%).

Income carries the most weight because this is a dividend list, but 60% of the score asks whether the share price has held up and the shares are easy to trade. That is deliberate: a high yield on a falling price is how a dividend cut often looks in advance, and the yield alone cannot tell a generous payer from a company the market has stopped believing.

90 of the 90 eligible companies paid exactly one dividend in the last twelve months. That matches how most German companies work: the shareholders vote on the dividend at the annual general meeting (Hauptversammlung), and the payment follows within days, so the ex-dividend date usually falls in spring or early summer. A German trailing yield is therefore one payment divided by today's price, and it changes in a single step each year when the new payment replaces the old one, instead of drifting quarter by quarter as it does for a US stock.

Two practical consequences follow. A company that cuts its dividend does so in one visible move, and the yield on this page reflects that only after the meeting at which the cut is voted. And a company that has just paid shows its full-year yield immediately, while one whose meeting is still to come is judged on last year's payment. The yield here counts only payments that happened, never a company's proposal or forecast, and it includes special dividends.

The typical eligible company yields 2.56%. Of the 24 companies yielding at least one and a half times that, 13 have a trend lens below 40, which means their share price has been weaker than most Xetra shares. More than half of the highest yields on this market therefore come with a weak price trend, and where the price has fallen, part of the yield is the drop in price rather than a bigger dividend.

The highest-yielding company inside the current top ten is Mercedes-Benz Group AG (MBG) at 8.4%, with a trend lens of only 27 and a twelve-month return of -16%. Its income lens is 73 and its trading-volume lens 99 out of 100, and trend carries only 15% of this score, which is how a share with a weak price can still rank here. It is the clearest example on the page of a yield that owes part of its height to the share price having fallen.

Among the 90 eligible companies the highest trailing yield belongs to freenet AG (FNTN) at 9.0%. It ranks 16 on this list, because its trend lens is 35 and its risk lens 65, both out of 100. No German payer we can measure yields more than 12%, so the 12% ceiling excludes nobody today; it exists because a yield that high is almost always a special dividend or a collapsed price.

Where a company has both ordinary and preference shares, preference shares usually carry a priority claim on the dividend, which is why they often pay slightly more per share. We keep the more heavily traded line of each company (4 duplicate lines were merged), and the yield, volume and score belong to that line. If you hold the other kind of share, your yield will differ a little.

The figure shown is before tax. German companies normally pay dividends after deducting German withholding tax, and how much of it a foreign investor can reclaim depends on the tax treaty between Germany and the investor's home country and on the investor's own tax position. Check the current rules with the Federal Central Tax Office (Bundeszentralamt für Steuern) or a tax adviser before comparing a yield here with what you would actually receive.

The typical eligible company yields 2.56%, and the typical company in the top ten 4.30%. The top ten yields more than the typical payer, but by less than a pure yield ranking would, which is the price of the steadiness rule: the list leans toward above-average yields on shares that have behaved, not the largest yields on offer. The German Top 10 by price-based X-Ray score ranks the same companies without regard to income.