Mercedes-Benz

Mercedes-Benz, based in Stuttgart, is one of the world's leading luxury carmakers, having refocused on high-margin premium and top-end vehicles after separating its truck business. The strategy leans on brand strength and pricing power, though it leaves the company exposed to demand for expensive cars in China, the United States and Europe. Like all carmakers it is cyclical, but Mercedes has been a generous dividend payer, tying the distribution to profits and adding large share buybacks. That delivers one of the higher yields in the index during good years, with the clear understanding that the payout will ebb and flow with the auto cycle and the costly transition to electric models.