Mercedes-Benz’s 6.7% Yield Lures Income Hunters, But a Washington Storm Could Upend the Car Maker’s US Access

A dividend yield of 6.7% is precisely the kind of number that catches the eye of income-focused investors in the Dax. At first glance, Mercedes-Benz looks like a steal: €3.50 per share in annual payouts against a stock price of €52.07. Yet that generous payout is less a sign of corporate munificence and more a reflection of a share price that has been mauled — down 15.5% since January and trading barely 2% above its 52-week low. Now a new risk from Washington is adding a layer of uncertainty that could test even the most patient dividend holders.

A draft bill known as the Motor Vehicle Modernization Act of 2026 is wending its way through the US House of Representatives. Its target: car manufacturers with ties to “foreign adversaries” — China chief among them. Mercedes-Benz finds itself in the crosshairs because 19.67% of its voting rights are held by Chinese interests. The BAIC Group owns 9.98%, while Li Shufu’s Tenaciou3 Prospect Investment Limited controls 9.69%. The legislation is still in committee, but the market has already begun pricing in a scenario that could restrict the company’s access to the world’s most profitable car market.

The US is no sideshow for the Stuttgart-based group. Mercedes-Benz USA sold 303,200 passenger cars and 40,000 vans last year, a total of 343,200 vehicles. Passenger car sales actually edged up 1% year on year, driven by premium SUVs. The company operates a major assembly plant in Tuscaloosa, Alabama, where it builds the new GLE and GLS models. That facility is slated to receive a significant chunk of a $4 billion investment package and employs around 5,800 people directly, with another 58,000 jobs tied to the supplier network in the region. Any disruption to US market access would hit a core profit center.

Should investors sell immediately? Or is it worth buying Mercedes-Benz?

Investors are left parsing a stock that has shown tentative signs of stabilisation — a 4.6% gain over the past seven days and a move back above its 50-day moving average — but remains deep in the red on a 12-month view. The share price of €52.07 is also roughly 16% below its 52-week high. The technical picture suggests a base is forming, but the fundamental picture has turned more complicated. A separate Senate initiative, the Connected Vehicle Security Act of 2026, sponsored by Senators Bernie Moreno and Elissa Slotkin, could further restrict Chinese-linked vehicle technology and software.

For income hunters, the dilemma is sharp. The Dax currently offers five stocks with dividend yields above 5%, and Mercedes-Benz leads the pack. But the car maker’s payout is essentially borrowed from future earnings: €3.50 per share translates to a payout ratio that will require the group to maintain operating margins as it pivots to high-end luxury models and pours capital into software and battery technology. A cyclical downturn or a political shock in the US could quickly threaten that consistency. By contrast, reinsurers like Munich Re and Hannover Re, yielding 5.3% and 5.4% respectively, have more predictable cash flows and decades of uninterrupted dividend history.

The Mercedes-Benz management strategy of focusing on margin-rich luxury rather than volume has been working so far, but it leaves the company exposed to shifts in consumer confidence and trade policy. The Chinese shareholder structure is not a new revelation — it has been known for years — but the current US legislative push turns it from a footnote into a potential liability. For now, the bill remains hypothetical. But as the stock hovers near its lows and the dividend yield flashes ever more brightly, the market is essentially being asked to accept that a car maker with a fifth of its voting power tied to Beijing is worth the same price as one without that baggage. That calculation may not hold forever.

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