Attractive dividend payments expected again
Published: Wednesday, Dec 11th 2024, 11:10
Updated At: Friday, Dec 13th 2024, 10:21
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Dividends are a key criterion for many investors when making investment decisions. Individual stocks on the Swiss stock exchange are currently offering attractive yields of up to 10%.
According to analysts' estimates analyzed by the news agency AWP, investors can once again expect high dividend payments. According to the estimates, a total of over CHF 60 billion should be paid out in the coming year.
Based on the current share prices (as at December 10), the dividend yield for the 137 companies included is 3.2%, which is roughly the same as in recent years.
Adecco with double-digit returns?
These are usually financially strong companies with stable cash flows that pay out high and constant dividends - with many of these companies increasing their dividends slightly year on year. Accordingly, the dividend yield remains high over the years.
In some cases, however, a high dividend yield is also a sign that the share price has fallen sharply. This also indicates a challenging environment and difficulties.
This is particularly evident in the example of Adecco: as the share price has almost halved since the beginning of the year, the yield based on last year's dividend is currently around 9.4% (compared to 6.2% at the beginning of 2024). However, the recent sharp fall in the share price was also an expression of falling dividend expectations in the market.
Should the dividend really be cut significantly - as expected by ZKB or Bank Vontobel, for example - the yield would also fall back into the old range. The shares of Medmix, Ascom, Gurit and Orior fall into a similar category.
Focus on insurance companies and banks
The situation is reversed in the traditionally high-yielding insurance sector, which performed well overall in 2024. If analysts have their way, the major insurers are likely to increase their dividend payouts in absolute terms, but not as much as the share price has risen in percentage terms - meaning that the yield is currently slightly lower than at the start of the year based on the 2023 dividend paid.
Reinsurer Swiss Re is once again at the forefront of the industry this year with 5.3% based on the expected dividends for 2024, closely followed by Zurich Insurance with 5.2% and Swiss Life with 5.1%. By contrast, Baloise, Vaudoise and Helvetia are seen as being just below the 5 percent mark.
Bank shares have advanced somewhat less strongly in the current year, and the returns here are correspondingly very high in some cases. The smaller institutions such as VP Bank (currently 6.2%), Valiant (5.5%), Cembra (5.1%) and Vontobel (5.0%) are more likely to be at the top.
However, the leading position of Liechtenstein-based VP Bank also has to do with the weak share price performance: the stock has lost over 10 percent so far this year. This is in contrast to the Cembra share, for example, which has gained around a quarter and is therefore yielding significantly less than a year ago despite the higher expected dividend.
UBS, the major bank involved in the integration of CS, is further behind in the sector comparison at 2.8 percent, although discussions about capitalization are certainly still preventing higher distributions and thus returns.
High returns in the broad market
In the broad market, the yield of 6.4% at cell phone provider Mobilezone, which has been committed to a generous dividend policy for several years, appears particularly interesting. Attractive dividends are also on offer from the investment company BB Biotech (6.3%), the outdoor advertising group APG (5.8%), Coltene (5.2%) and Orell Füssli (4.9%).
Among industrial companies, Burkhalter and Oerlikon occupy the top positions with expected returns of just over 5 percent each. Meier Tobler and Stadler also offer above-average returns in a sector comparison, although these companies are also among the stocks that have fallen significantly over the course of the year.
Nestlé overtakes Pharmas
There was a changing of the guard among the defensive heavyweights from the food and pharmaceuticals sectors: Nestlé shares are currently yielding 4.1% following the price decline in the current year. This represents an increase of one percentage point compared to the beginning of the year.
The shares have thus overtaken the pharmaceutical stocks Novartis and Roche. Following the rather flat share price performance, the yields for both pharmaceutical giants are at 3.9%. By contrast, little movement is expected in the traditionally high-yielding real estate sector, where the ranking is led by Varia (7.4%) and Allreal (4.4%).
For the evaluation, the average of the most recent estimates for the dividend per share (DPS) for 2024 and the share price as at December 10, 2024 were taken from the AWP Analyzer. The basis for comparison was the share price at the beginning of the year and the dividend actually paid out for 2023.
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