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Postal service player DPDHL bucks sunset trend as it takes on the world

Thiveyen Kathirrasan Published on Thu, Jul 25, 2019 / 6:48 PM GMT+8

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SINGAPORE (July 22): German 10-year bund yields have spent much of July at -0.24% to -0.26%. For yield seekers, look no further than Deutsche Post, trading as Deutsche Post DHL Group (DPDHL), an interesting company that is trading at a dividend yield of 3.92% (see Chart 1). Its yield spread — the difference between dividend yield and risk-free rates — is more than 4%, given the current negative yield on risk-free bunds. The catch, of course, is tax. For German dividends, investors have to pay a withholding tax of 25%+5.5%.

In Germany, all dividends, regardless of whether they are paid to a resident or a non-resident, are subject to a 25% withholding tax plus a solidarity surcharge of 5.5% of the tax due as a flat tax, unless the shareholder is a European Union resident company that owns 10% or more of the company paying the dividend.