Top Dividend Stocks: With Novo Nordisk, RE Royalties, and SAP, investors reap where others only see risk

Novo Nordisk – Between headwinds and strategic realignment

Novo Nordisk's current financial results paint a mixed picture. On the one hand, the fourth quarter of 2025 brought a solid year-end result with revenue of around USD 12.5 billion and earnings per share of USD 1.02. On the other hand, the outlook for 2026 is weighing heavily on sentiment. The group expects a decline in revenue of up to 13% and a similar drop in operating profit. The main drivers are falling net prices in the US due to the Most Favored Nations agreement and the beginning of patent loss for semaglutide in key markets outside America. Added to this is increasing competitive pressure, particularly from Eli Lilly.

Nevertheless, management is taking clear steps to maintain and expand its position. The launch of the oral version of Wegovy in the US shows strong demand and gives the company a head start in the pill segment. At the same time, the pipeline is being further developed. Although the successor candidate, CagriSema, achieved good weight loss rates in studies, it fell short of expectations. The company is responding with investments in production, such as a EUR 400 million expansion in Ireland, and strategic partnerships, such as with the telemedicine platform Hims & Hers, to broaden its distribution channels.

Despite the operational dip, the company is shareholder-friendly. The Executive Board is proposing a total dividend of DKK 11.70 (approximately EUR 1.57) per share to the Annual General Meeting on March 26. This would result in a dividend yield of just under 5%, which makes the investment attractive. In addition, the valuation discount offers upside potential. With a price-to-earnings ratio of around 11, the stock appears moderately valued compared to its competitors and its own history. If Novo Nordisk succeeds in stabilizing margins through volume growth and its next pipeline candidates, the market could reward this with a significant revaluation. The stock is currently trading at EUR 33.17.

RE Royalties – How a financier is capitalizing on the energy transition

The business model sounds simple, but it is still the exception in the industry. RE Royalties, based in Vancouver, buys revenue shares in wind and solar parks or battery storage facilities. This provides project developers with capital without having to give up company shares. In return, the financier receives a fixed percentage of the gross revenue from the plants over a period of 20 to 25 years. The model is well known in the commodities sector, but is still unusual in the renewable energy sector. The interesting thing about it is that cost increases at the operator level have little impact on RE Royalties because the income is linked to revenue and not to profit. This ensures long-term, predictable revenues.

The Canadians are currently pushing ahead with their expansion in the US with an investment volume of up to USD 9 million. Specifically, USD 3 million was initially paid to the developer Solaris Energy in January, followed by a further tranche of USD 800,000 at the beginning of February. The first project package comprises 15 plants in California, Maine, Delaware, New Hampshire, and Colorado, 9 of which are already under construction. The royalty structure is designed to provide a minimum return over 25 years and will continue thereafter for the remaining life of the project. A second portfolio with 9 additional solar projects is currently under review.

To date, the company has reliably paid CAD 0.01 per share on a quarterly basis for many years. Since December, the board of directors has changed the policy to an annual payment. This is a smart move to target capital for new projects. The last quarterly payment was made in January 2026. This means that the distribution remains unchanged, which speaks for continuity and trust in the growth phase of a company. The financial leeway created by the change enables management to rapidly advance the promising project pipeline. In the long term, shareholders will also benefit from this. If the dividend remains stable, the current share price of CAD 0.385 will result in a dividend yield of around 10.4%.

SAP – Between transformation progress and market skepticism

SAP is currently undergoing one of the most profound changes in its corporate history – and the capital market is reacting with uncertainty. The latest quarterly figures show a company that is delivering solid operational performance. The cloud business grew by 26% to around EUR 21 billion, with total cloud order backlog reaching a record level of EUR 77 billion. At the same time, the growth rate of the short-term cloud backlog was slightly lower than hoped for at 25%, causing the share price to temporarily slump by double digits. Investors are now asking themselves whether this was an overreaction due to growth fears or whether a sustained slowdown is on the horizon.

The strategic direction is clear. SAP is pushing ahead with the migration of its existing customers from local installations to the cloud. With support for the old ECC system ending at the end of 2027, customers are under additional pressure to make a decision soon. Those who switch will pay on average two to three times the previous support fees. At the same time, the company is integrating AI deeply into its products. SAP Business AI was already included in two-thirds of all new cloud contracts. The AI co-pilot Joule is set to automate a large part of operational processes in the future. AI is expected to drive revenue growth.

The Executive Board plans to increase the dividend. For 2025, EUR 2.50 per share is to be distributed. That is a hefty increase of 6.4%. Based on the current price of EUR 173.72, this would result in a yield of a good 1.4%. At 40.7%, the payout ratio is at the lower end of the self-imposed target of at least 40%, which leaves room for future increases. In addition, the newly launched share buyback program of up to EUR 10 billion signals that management considers its own share price to be undervalued. For long-term investors, this offers the prospect of dividend growth and additional price potential through the buyback activities.

The year 2026 will reward investors who focus on substance rather than the geopolitical climate. Novo Nordisk is proving with an unexpectedly high dividend yield of just under 5% that even a cyclical decline in profits is not dampening the pharmaceutical giant's shareholder focus. RE Royalties shows how a clever financing model can be used to profit from the energy transition and offer shareholders a reliable dividend despite the company's growth trajectory. SAP, on the other hand, is signaling with a dividend increase and a billion-dollar share buyback program that the management board considers the recent slide in the share price to be exaggerated and that confidence in the AI-driven transformation remains unbroken.