Steady returns in uncertain times: The yield strategies of Deutsche Telekom, RE Royalties, and Allianz

Deutsche Telekom – Strong foundation, favorable valuation!?

Deutsche Telekom is heading toward the end of 2025 with an interesting mix of stable fundamentals and conspicuously weak stock performance. The latest quarterly figures paint a picture of continuity. The Company is sticking to its forecast of adjusted EBITDA of more than EUR 45 billion and earnings per share of around EUR 2.0. Analysts expect a similar figure of around EUR 1.97. However, investors appear to be ignoring the robust operating data. One reason for the skepticism is Amazon's "Project Kuiper," a satellite internet network scheduled to launch in late 2025, as well as rumors of extremely low-cost mobile phone plans for Prime members, which could put long-term pressure on the established business models of companies such as Deutsche Telekom and its US subsidiary T-Mobile US.

Two strategic investment areas are key growth drivers for the future. On the one hand, the Company is investing over EUR 1 billion into the construction of a European AI data center in partnership with NVIDIA. Even in turbulent times, Deutsche Telekom continues to expand its operations. The expansion of the fiber-optic network is being vigorously pursued, which is intended to provide the Company with an important second pillar. On a positive note, Telekom's mobile network in Germany is among the best in class, as confirmed by another victory in the 2025 network test. This is a strong marketing advantage over competitors. However, the major challenge now lies in translating these operational strengths into a more favorable market valuation.

For investors looking for regular returns, Telekom shares offer a convincing foundation. The Company has pursued a reliable dividend policy for years and traditionally distributes 40-60% of its adjusted earnings per share to its shareholders. Market observers expect a dividend of EUR 0.90 per share for 2025. At the current price, this represents a solid dividend yield of around 3.4%. In addition, share buybacks with a volume of up to EUR 2 billion are underway. This combination of dividend payments and capital returns makes the investment attractive for shareholders with a long-term perspective. The share is currently available for EUR 26.57.

RE Royalties – The perpetual motion machine of project financing

Imagine a machine that, once fed with capital, produces steady returns and drives itself. This is precisely the principle embodied by the RE Royalties business model. The Company finances solar, wind, and hydroelectric power projects and, in addition to loan repayments, also receives a small percentage of their long-term electricity sales revenues. To achieve debt-free balance sheets, borrowers strive to repay their loans as quickly as possible in order to reduce the interest burden and become debt-free. This returning capital then fuels the next round of investment.

To ensure that this financial perpetual motion machine does not falter, the Company focuses on maximum stability. It finances almost exclusively existing plants with established technology, whose revenues are secured by long-term power purchase agreements. This avoids the risk of construction delays or technology failures. This focus on operational infrastructure acts like a flywheel. It ensures predictable cash flows, regardless of stock market sentiment or short-term political swings.

The measurable output of this machine is the dividend. The stable, recurring royalty income feeds the distributions to shareholders. RE Royalties consistently pays a quarterly dividend of CAD 0.01, which generates a remarkable dividend yield of over 13% at the current low share price. This dividend is therefore not an artificial construct, but the direct result of the cycle described above. It is fed by the operating income from the financed energy projects and underscores the model's ability to generate consistent returns. The stock is currently trading at CAD 0.29.

Allianz – Ahead of quarterly figures: Strong expectations, solid framework

Allianz is set to release its latest financial results in mid-November. More precisely, on November 14, the quarterly results for the third quarter of 2025 are expected. Analysts estimate earnings per share at an average of EUR 7.21. That would represent a significant increase compared to the previous year. The revenue outlook is more pessimistic, with a slight decline to around EUR 19.76 billion forecast. It will be interesting to see how the group addresses these seemingly contradictory developments.

Both the quarterly figures and the underlying operating performance deserve attention. Allianz has proven several times in recent quarters that it can manage its core business efficiently. In the second quarter of 2025, the Company achieved an operating profit of EUR 4.4 billion, a record figure. This solid foundation from its various business segments, from property and casualty insurance to life insurance, gives the group stability. In a difficult market environment with regulatory challenges and digital competition, this is not a matter of course.

For investors who are looking for consistent returns, dividends play a key role. Allianz has a clear policy in this regard: it traditionally distributes around 60% of its adjusted net income to its shareholders. Specifically, market observers expect a dividend of around EUR 16.80 per share for the 2025 financial year. The Company is thus continuing its policy of gradually increasing distributions. In addition, Allianz plans to return at least 15% of its net income to shareholders through share buybacks between 2025 and 2027. This dual strategy makes the investment particularly attractive. The share currently costs EUR 356.00, which translates into a dividend yield of around 4.7%.

In uncertain times, these three companies offer reliable dividends as a solid foundation for any portfolio. Deutsche Telekom combines an attractive payout of 3.4% with future investments in AI and fiber optics, but faces valuation doubts amid new competitors. RE Royalties delivers spectacular returns and a dividend yield of over 13% with its unique renewable energy project financing model. Allianz, meanwhile, stands for predictable quality and plans to increase its dividend further in 2025, supported by strong operating income.