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3 German dividend stocks to buy amid Dax holding a bullish bias

26 May 2022 By

The German Dax index holds a bullish bias while the series of higher highs and higher lows persists. So what are the best German dividend stocks to buy? 

The global stock markets may have had a rough start to the trading year, as seen by the US equity markets correcting drastically. In Europe, the main indexes followed on their US peers’ tracks, but the bullish bias persists in Germany. 

A bullish trend is defined as a continuous series of higher highs and higher lows. In other words, as long as the series persists, the overall market conditions are bullish. 

Just like the German Dax index shows below. 

So what are the best German stocks to buy given the Dax being bullish? Here are three names to consider, especially because they pay a hefty dividend: 

  • BASF
  • MunichRe
  • Bayer

BASF

BASF is one of the largest chemical companies in the world, active in the basic materials sector. It employs over 100,000 people, and it currently trades at a trailing P/E ratio of 8.87. 

This is one of the European companies with a high dividend yield, with the forward annual dividend yield reaching 6.97%. BASF operates with a profit margin of 6.8%, and its stock price declined in 2022, just like the German Dax index did. 

However, a possible reversal pattern might be in the cards. In the past three months, the price formed a falling wedge pattern, and bulls are waiting for the break above the upper trendline. On a daily close above, BASF’s stock price has no resistance all the way to the $60 level. 

MunichRE

MunichRE is a reinsurance company from Germany. Founded in 1880, it has a forward annual dividend yield of 4.98%. Also, the dividend payout ratio is 46.60%.

The stock is currently trading at a trailing P/E ratio of 10.51 and a price/sales ratio TTM of 0.48. The stock price topped around EUR280/share, where it formed a possible double top pattern, and currently trades at EUR220/share.

Bayer

Bayer is a German drug manufacturer founded in 1863. It employs over 100,000 people as well, and it pays a hefty dividend. 

The forward annual dividend yield is 3.08%, and the dividend payout ratio is 87.44%.