DIVIDENDS WITH SUBSTANCE: INTESA SANPAOLO, DWS GROUP, AND RE ROYALTIES UNDER THE MICROSCOPE

Intesa Sanpaolo: The Quiet Paymaster from Italy

Those looking for high dividends will find them primarily among European banks. Intesa Sanpaolo stands out in particular. Italy's industry leader reported a net profit of EUR 9.3 billion for fiscal year 2025. Between early January and late March 2026, earnings continued to rise: Net income increased by 6% compared to the same period last year to just under EUR 2.8 billion—the best quarterly result in the company's history. Management subsequently confirmed the full-year profit target of around EUR 10 billion. Analysts therefore expect the dividend to be raised significantly from EUR 0.38 to EUR 0.44 per share. At the current share price of EUR 6.16, the dividend yield is just over 7%. Over the past three years, dividend payouts have already increased by more than 30%. Intesa pays its dividend semiannually in May and November, ensuring steady cash flow for shareholders.

With a price-to-earnings (P/E) ratio of about 10, the valuation appears moderate relative to the bank's earnings power. Another factor in the stock's favour is this: While the takeover bid by its main competitor, UniCredit, for Commerzbank is facing fierce resistance—and its CEO, Andrea Orcel, is literally wearing himself out in the struggle with the federal government, the executive board, and the workforce—Intesa's expansion plans could come to fruition quickly. An offer of EUR 30.6 billion for Monte dei Paschi di Siena is currently being reviewed by the board of directors of the potential acquisition target. Despite a bidding war with the smaller BPM, these negotiations are proceeding relatively quietly. Unlike Orcel, Intesa CEO Carlo Messina is considered a man of few words. According to the Italian press, the opera lover has meticulously prepared the deal and is discreet and diplomatic. He also maintains a smooth and relaxed relationship with the government in Rome.

DWS: The asset manager that creates wealth itself

Regardless of whether a successful takeover of Monte dei Paschi could influence the dividend policy, there is a bitter pill for dividend hunters to swallow when it comes to Italian stocks: the 26% withholding tax. While the German flat-rate withholding tax is partially credited, the remaining 11% can theoretically be refunded. However, in Italy, obtaining a refund for overpaid taxes is considered an extremely cumbersome bureaucratic process that can take several years. Those who prefer a straightforward approach will find an excellent alternative in Germany with the DWS Group. The fund subsidiary of Deutsche Bank now manages assets totaling EUR 1,093 billion—also a record high. The 2025 fiscal year reflected this trend. Consolidated net income climbed 43% to EUR 927 million, while earnings per share rose from EUR 3.25 to EUR 4.64. Long-term net inflows totaled EUR 33.7 billion—reason enough for management to raise its medium-term targets. The regular dividend for the just-concluded 2025 fiscal year has already been significantly increased from EUR 2.20 to EUR 3.00 per share, underscoring the strong operating performance. Following the record levels achieved in assets under management, CEO Stefan Hoops held out the prospect of another extraordinary special dividend for the coming cycle; in addition, the regular dividend is to be increased in the coming years in line with the targeted earnings growth of 10 to 15%.

The analyst consensus forecasts EUR 3.27 for 2026, with EUR 3.82 expected for 2027. At the current share price of around EUR 65.00, this corresponds to a yield of between 5% and 6%. The fact that Hoops was appointed to the Executive Board of the parent company, Deutsche Bank, effective May 1, while simultaneously retaining his position at DWS, can only be beneficial for shareholders. Both companies aim to integrate their collaboration in asset and portfolio management even more closely to further improve their offerings for affluent private clients, known as high-net-worth private clients. The DWS stock has recently bucked the trend, rising on the back of a "Buy" recommendation from Exane BNP Paribas, and is currently trading at an all-time high. However, with a P/E ratio of about 13, it is by no means overvalued. The bottom line is that DWS is a solidly positioned asset manager with a clear dividend culture—a reliable component for a yield-oriented portfolio.

RE Royalties: The Unknown with the Biggest Paycheck

RE Royalties ranks a whole yield tier higher. The Canadian company has consistently paid a dividend of CAD 0.01 per share in recent quarters. At the current share price of CAD 0.36 (around EUR 0.22 in Frankfurt), the annual payout of CAD 0.04 yields more than 10%—significantly higher than the two European stocks. The 25% Canadian withholding tax is therefore manageable, especially since many brokers, under the double taxation agreement, now withhold only the reduced rate of 15% for individuals residing in Germany or Austria. In December 2025, the Executive Board changed the dividend payment frequency from quarterly to annual in order to gain more financial flexibility. For investors, this means receiving a payout once a year, but at an attractive rate.

The business model is unique in the industry. RE Royalties applies the royalty principle—familiar from the commodities sector—to renewable energy. The company provides capital to project developers and, in return, receives a long-term share of the electricity revenues from the respective plant—without having to bear any operating or maintenance costs. Currently, the portfolio comprises approximately 130 such royalties in Canada, the US, Mexico, Chile, and the Maldives, with a gross investment volume of around CAD 80 million and an internal rate of return of 19%. In the first quarter, royalty revenues rose by 30% compared to the same period last year. The project pipeline is well-stocked with letters of intent totaling approximately CAD 20 million. In addition, the company is evaluating potential investments totaling approximately CAD 200 million, as COO Peter Leighton explained at the International Investment Forum (IIF) in May this year.

https://youtu.be/5dQvcZkFR7E

Given the share price and the resulting small market capitalization of only about CAD 16 million, management—which holds approximately 24% of the shares—is clearly dissatisfied, considering the project volume is many times higher. Since March, the consulting firm PwC has therefore been commissioned to formally review all strategic options, from a sale to a recapitalization. "Our goal is to be optimally positioned to capitalize on the strong demand in the sector and create value for our investors over decades," explained co-founder and CEO Bernard Tan. This adds an extra layer of excitement to the stock. If the process were to end in a takeover premium, that would be a welcome bonus for shareholders—though it would be a shame for those who want to continue to reap double-digit dividend yields. Aside from this minor drawback, however, the stock offers an unusual combination of current income, growth potential, and a unique strategic scenario.