Only a few German Stocks lead Investors to Success
For investment success, it is important to back the right companies. According to an asset manager, good investment ideas include Siemens and SAP. Some banks, on the other hand, have destroyed a lot of capital. Most of the value created for investors in the German stock market is represented by a very small number of shares. Over the last 20 years, €1.7 trillion in value has been generated through price gains, dividends and share buybacks, shows a new study by the Flossbach von Storch Institute, the think tank of the eponymous asset manager based in Cologne.
With around 70 billion euros under management. However, since January 2003, many German stocks have not brought investors money, while twelve stocks already account for half of the total value created.
For the study, all 1,000 publicly traded German stocks on the Prime Standard and General Standard sectors of Deutsche Boerse were analyzed between early 2003 and December 2022. remainder of one month from To establish a comparison with very short and safe investments – similar to keeping money in the account during the low interest policy years. Equity returns above those of these bonds are defined as value creation. The start of the study was set in January 2003, so that the stock market was examined from the lowest level after the Noir market crash.
The result: a good half (52%) of all value created was attributed to dividends. The remaining 41% came from price appreciation and 7% from share buybacks.
A few well-run Companies Dominate
If we include the values generated by all ranking entries, this would come to a total of €1.7 trillion. The amount has already been reached with the first 118 shares, which represents around 12 percent of the stock. Some of the actions behind it also created value, but their contribution was eroded by losers in general. “Only a few large, well-managed companies in attractive sectors dominate the German stock market. They have been listed for a long time and have grown over the years,” says study author Philip Emmenkotter.
According to the study, Dax Siemens, SAP, Allianz, Mercedes-Benz Group and Deutsche Telekom generated the most value for investors, with more than €75 billion each. It was followed by BASF, BMW, VW (common shares), Munich Re and Deutsche Post. Almost all stocks are also among Dax’s top dividend payers. The biggest value destroyers since 2003 include Commerzbank, property lender Hypo Real Estate Holding and Deutsche Bank, which finished last (1013) with nearly €25 billion destroyed. Insolvent payment service provider Wirecard ranked 938th.
However, the picture is also linked to the period under investigation: if the analysis had been done before the collapse of Neuer Markt, Deutsche Telekom, for example, would have been worse.