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Numbers as of 12/31/14 unless otherwise noted.
Since you clicked through on my headline, I'll assume that you're ready to be convinced that you should be investing in German stocks. So without delay, let's jump right in!
- Between 1974 and June 2014, the DAX had an average annual return of 9.2%
- Between 2002 and 2007, the DAX had an average annual return of 22.8%
- Over the past 10 years, the DAX has had annual double-digit returns in seven years (27.1% in 2004, 22% in 2005, 22.3% in 2006, 23.8% in 2007, 16.1% in 2009, 29.1% in 2011, 25.5% in 2012)
- You want growth? Four DAX companies had a compounded annual growth rate (CAGR) of more than 20% over the past 10 years. A 20% CAGR would turn 1 EUR of profit into more than 6 EUR over 10 years. The four companies that achieved this incredible growth were:Volkswagen(33.7%),Infineon(24.3%),Fresenius(23%), andLinde AG(21.2%).
- Go outside of the DAX (to the SDAX, MDAX, and TECDAX) and you can find even faster growth.Wirecard AGgrew net income at an average rate of 64% over the past decade whileBertrandtgrew its bottom line by 39% per year.
- Profit growth can sometimes be misleading, particularly when it comes to cyclical companies, which can show high net income growth thanks to their cyclicality. But companies on Germany's indexes are notching fast revenue growth too. Wirecard's revenue growth rate was above 65% over the past 10 years. BothDeutsche Wohnenandfreenethave 10-year revenue growth rates above 20%.
- Dividends matter for German stocks! The stock price for K+S AG shot up nearly 800% over the 20 years ending December 31, 2014. But the dividend-adjusted returns over the same time period weremore than 1,500%.
- 10-year German Government bonds currently yield 0.51% (1/15/2015). 29 of the 30 DAX companies have a dividend yield higher than that.Commerzbankis the only DAX comany without a better yield it hasn't paid a dividend since 2007.ThyssenKrupp, with just recently reinstated its dividend, has a yield that barely tops German bonds. But "just barely" still counts.
- Two DAX companies finished the year with dividend yields above 4%.Mnchener Rckversicherungs-Ge AG(4.35%) andE.ON(4.2%).RWE,BASF, andAllianzwere all really close with respective dividend yields of above 3.8%.
- Do you want even bigger dividends? Check out the smaller companies.Bilfingerand freenet both finished 2014 with dividend yields above 6%.Telefonica Deutschlandhad a massive 10.7% dividend yield.
- Many investors use return on equity as a gauge for the quality of a business, and companies with an ROE in the double-digits are typically seen as successful. Over the last 12 months, 21 of the 30 DAX stocks have notched an ROE in the double digits. The three highest ROEs in the DAX were:Deutsche Post(25.7%),Continental AG(22.3%), andDeutsche Boerse(20.7%).
- You could've made a killing in the market buying just DAX stocks: Over the past 20 years, six DAX stocks had dividend-adjusted returns of more than 1,000%. Thelowestreturn of those six (Henkel AG), delivered a 1,102% total return for investors. That works out to an average of almost 13% per year. At the high end,Fresenius SE's 2,329% return comes out to 17% per year.
- If you're looking for value stocks... Three companies in the DAX finished the year with price-to-earnings ratios below 10. Munich Re, Volkswagen, andDaimlerwere the cheapest stocks in the DAX by P/E.
- Small stocks can be cheap too. At the end of 2014, Deutsche Beteiligungs, Talanx,Schaltbau Holding, andHannover Rckall had P/E ratios below 10.
- Dividend lovers rejoice: Over the past 10 years, I count 28 companies between the MDAX, SDAX, and TechDAX that grew their per-share dividends at double-digit rate annually.
- STRATEC Biomedical was among the fastest growers. Its dividend went from 0.05 in 2004 to 0.60 in the 12 months ending 9/30/2014.
- If fat profit margins are more your thing, then you'll love Deutsche Boerse andSAP. They had respective EBIT margins of 42% and 31% over the most recently reported 12 months.
Could I go on? You bet I could. There are a lot of good reasons to be investing in the German market, and there is a heck of a lot of great German companies to invest in.
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The article 17 Facts About German Stocks That Will Make You Want to Invest originally appeared on Fool.com.
Matt Koppenheffer does not own any of the above-mentioned stocks. The Motley Fool does not own any of the above-mentioned stocks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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