Rheinmetall Pays a Record Dividend While a Romanian Contract Row Deepens the Stock's Slide

Rheinmetall paid a record €11.50 dividend but shares fell 28% YTD. A €5.7B Romanian contract renegotiation threatens expansion, while backlog hits €73B. Stock near critical support.

Rheinmetall shareholders collected a record €11.50 per share dividend this morning, but the payout did little to mask the deepening gloom around the stock. The German defence contractor’s shares closed Thursday at €1,146.80, barely recovered from a fresh 52-week low of €1,118 touched midweek. Having gone ex-dividend earlier this week, the equity has now shed more than 28% since the start of the year and sits roughly 30% below its 200-day moving average.

A major source of the current uncertainty is a clash in Bucharest over the so-called SAFE programme, a contract worth €5.7 billion. Rheinmetall has demanded a renegotiation of the terms by 31 May, seeking to reduce the originally agreed local manufacturing quota in Romania. Defence Minister Radu Miru?? has flatly rejected the request, citing steep price increases already seen on infantry fighting vehicles and patrol ships. The ministry is now considering diverting the funds toward joint European Union procurement projects instead – a move that would derail the company’s ambitions at NATO’s eastern flank.

The backdrop to this standoff is a record order book. The group’s backlog hit €73 billion at the end of the first quarter, roughly five times the targeted annual revenue. In April, the Romanian defence ministry selected Rheinmetall’s Lynx KF41 armoured vehicle for a multi-billion-euro acquisition programme, adding to the pipeline. Meanwhile, the company is pressing ahead with a massive expansion of its artillery shell production: capacity is set to reach 1.1 million rounds of 155-mm ammunition by 2027 and 1.5 million by the end of the decade. The recent acquisition of NVL has also turned Rheinmetall into a fully integrated naval systems provider, a fact it showcased this week at the BSDA defence fair in Bucharest. Adding to its diversification, the group has partnered with Deutsche Telekom to enter the fast-growing drone defence market.

Financially, management has held its guidance steady. For the current fiscal year, Rheinmetall expects revenue of up to €14.5 billion and an operating margin of around 19%. Looking further ahead, the company has set a revenue corridor of €14 billion to €14.5 billion for 2026, signalling confidence in its multi-year growth trajectory despite the near-term headwinds.

The stock’s technical picture remains fragile. After hitting its 52-week low, the share price recovered only marginally to Thursday's close. The distance to the 52-week high now exceeds 40%, and with the equity trading well below its 200-day line, chart watchers are eyeing the recent low as a critical support level. The ex-dividend adjustment has added a mechanical element to the decline, but the heart of the selling pressure lies in the Romanian deadlock.

The 31 May deadline now looms as a decisive catalyst. If Rheinmetall and Bucharest fail to find common ground, the cancellation or redirection of the SAFE programme would represent a serious setback for the group’s expansion in Eastern Europe. For now, a vast order backlog and ambitious expansion plans coexist with a steep share price slide – and investors are waiting to see which side of the equation wins out.