March 2025: High dividend growth predicts further profit increases
The annual results season is behind us and it is time for a review. The companies in our fund have shown strong figures and the average profit increase in the final quarter of last year was more than 20% compared to the same quarter a year earlier. The management of our companies has announced an average dividend increase of 18%. On the stock market, our stocks were rewarded for this good news with a price increase of 1.3% in March. This brings the return on our fund this year to 6.0%. Looking at the broader European stock markets, March was not such a good month. Under the influence of the continuing threat of a trade war between the United States and Europe, stock prices fell. On average, the European stocks in the MSCI Europe index achieved a return of -4.0% in March, taking the MSCI return in Europe this year to 5.9%. The current valuation of the stocks in our fund is very low at 8 to 9 times the expected cash flow. We see a lot of room for further price increases if our companies can continue the current positive profit development. Investors in the Sustainable Dividends Value Fund have achieved a return of more than 75% on their investment since inception in 2016.