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 E.ON SE (XETRA:EOAN.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).
Is E.ON SE (EOAN.DE) the Best German Dividend Stock To Buy Now?
Ranking 8th on our list of the best German dividend stocks is E.ON SE (XETRA:EOAN.DE), an Essen-based energy company operating in Germany, the UK, Sweden, the Netherlands, and internationally. The company manages power and gas distribution networks, provides sustainable energy solutions for cities, industries, and households, and installs smart energy meters, solar systems, and heating solutions.
On January 9, 2025, E.ON SE (XETRA:EOAN.DE) raised €1.75 billion through two new bond issues – an €850 million bond due in 2033 with a 3.5% coupon, and a €900 million green bond maturing in 2040 with a 4.0% coupon. The offering saw strong demand, attracting over €4.3 billion in orders. With this, E.ON has already covered a large part of its 2025 funding needs early in the year.
In fiscal year 2024, E.ON SE (XETRA:EOAN.DE) reported an adjusted EBITDA of €9.0 billion, landing at the high end of its guidance, and a net income of €2.9 billion. 2023 had some one-off gains, so profits in 2024 were slightly lower than last year. However, underlying performance improved because of smart investments and solid operations. E.ON invested a record €7.5 billion into expanding and modernizing its energy networks. That includes nearly half a million new connections to the grid across Europe. The company also poured more money into digital energy tools, battery storage, EV charging, and smart meters, especially in the UK and Germany. E.ON plans to invest €43 billion between 2024 and 2028, with the bulk going toward electricity networks.
Overall, EOAN.DE ranks 8th 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 EOAN.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.
