The US Federal Reserve announced its interest rate policy on Wednesday and decided not to make any changes. This was expected by the markets – and by me as well. However, the issue of interest rates will soon be back on the table – and by mid-March, I will recommend turning to dividend stocks. This is because interest rates in the US – and also currently in the eurozone – are likely to decrease, although perhaps not in March. Then, high dividends will become even more important, such as those paid by Munich Re.

Munich Re: Stronger than ever! The company is currently stronger than ever. In my opinion, the market capitalization of around 53 billion euros is relatively low, as the revenue for the current year is expected to be significantly higher at around 70 billion euros. From this perspective, the Munich Re stock is likely to be valued at a P/S ratio of only 0.75.

Based on my estimation for the upcoming annual report, the company is expected to have achieved a revenue of around 70 billion euros last year and will also present a P/S ratio of only 0.75 to 0.78. The net profit for the past year is expected to be around 4.5 billion euros. However, current prices do not reflect this.

Munich Re will also distribute a high dividend. Based on the values for this year, Munich Re is expected to pay out between 3.2 and 3.4% in dividends. The dividend is expected to increase again next year, as the company should earn approximately 10% more in 2024 than in the previous year.

Munich Re: The chances remain high I have been pointing out the chances of increasing dividends with this stock for years. This has a simple effect on your portfolio: The dividend yield will also increase from year to year. In a simple calculation, I have determined that the dividend has increased by a factor of more than 5 in the past 20 years.

If someone had purchased the stock 20 years ago, they would now be earning a dividend yield of over 10% each year. During this time, the stock prices have more than quadrupled. From the perspective of long-term investors, this stock is a long runner.

This will continue to be interesting for investors even with lower interest rates. Personally, I have achieved an average total return of more than 10% p.a. over the past 20 years. New interim highs, such as the current one, are not a reason to sell the stock. That is why Munich Re is one of the alternatives for achieving high dividends when interest rates are declining starting in mid-March.

Munich Re – WKN: 843002 – ISIN: DE0008430026 Source: https://fundamental.aktienscreener.com/DE0008430026/EI/muenchener-rueckversicherungs-gesellschaft-ag-in-muenchen/data