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 Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (XETRA:MUV2.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).
A close-up of a signed policy document from an insurance-reinsurance company.
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (XETRA:MUV2.DE)
Dividend Yield as of April 21: 3.33%
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (XETRA:MUV2.DE), based in Munich and founded in 1880, is a global insurance and reinsurance company. Its plans include policies from life, health, and property reinsurance to specialty coverage like cyber, agriculture, and natural catastrophes. Munich Re is one of the best German dividend stocks to invest in, with a dividend yield of 3.33% as of April 21.
On March 24, Goldman Sachs raised the price target on Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (XETRA:MUV2.DE) from €562 to €573, but downgraded the stock from Buy to Neutral. Munich Re’s stock has climbed about 20% since September 2024, outperforming the broader market. While analysts at Goldman Sachs still see strong earnings and capital return potential, the current valuation looks a bit stretched, and with earnings estimates now matching market expectations, there is not much room left for surprise gains.
Munich Re reported a net profit of €5.7 billion in 2024, beating its annual targets for the fourth year in a row. The company’s performance continues to outpace its peers, both in earnings and in shareholder returns. Since launching its Ambition 2025 strategy back in 2021, the share price has essentially doubled, crossing €500 in 2024. Munich Re also plans to increase its dividend to €20 per share and has approved a new €2 billion share buyback, €500 million more than last year, pending shareholder approval.
Overall, MUV2.DE ranks 9th 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 MUV2.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.
Hedge Fund Resource Center