Dividends remain a good attraction for the Spanish stock market. In 2023, the Ibex 35-listed distributed 30.295 million among its shareholders; This is equivalent to a 19% increase compared to last year and is “already around the annual maximums that occurred at the beginning of the last decade”. exchange operator Bolsas y Mercados Españoles (BME).
Ibex 35’s dividend yield was 4.1% “This means that on average each share in the Spanish index provides a dividend equivalent to 4% of the price of that share. Or the same: each year that shareholder will have made a profit of 4%. Return thanks to the aggregation of dividends,” explains Mapfre from. This 4.1% means exceeding inflation, which closed the year at 3.1%, while headline inflation, which does not take into account energy and fresh products, ended at 3.8%. The average CPI for 2023 was 3.55%. The same thing happens in this case: Ten-year Spanish bond currently yielding 3.17%.
This is the importance of shareholders’ remuneration in the Spanish stock market. seven Ibex 35 companies they turn to him current inflation (February CPI: 2.8%) and dividend yield. Enagás is the leader in this field with a dividend yield of 12.9%, followed by Endesa with 12.5%, Telefónica with 7.9%, Mapfre with 7.4%, Naturgy with 6.85%, Acerinox with 6% and 5%, Logista follows with 8. February from BME. The increase in shareholder pay and the decline in prices means that 23 companies listed in the national index have already managed to outperform the CPI with their dividends.
It should be taken into account that dividend yield is a ratio The market, which includes the company’s payments to shareholders and share prices in the last year, is closely followed. If the stock falls and the dividend is maintained, the percentage increases, so It is necessary to see whether a very high return is hiding behind a weak financial or operational situation.. For example, Enagás is down 11.7% year-on-year, Endesa is down 10.2%, Naturgy is down 26.9% and Acerinox is down 4%, while three other companies have improved on the Ibex 35 so far this year.
Shareholders are also watching closely other financial ratios such as ‘payout’, Cash flow generation is the percentage of profits distributed as dividends, as well as earnings per share (EPS), financial debt, and past shareholder compensation.
Ibex 35 majors increase dividend
In the same week, Iberdrola and Banco Santander announced dividend increases that mimic the 28% pay increase given to Inditex shareholders following historic results. The fashion company will pay $4.8 billion to its shareholders this year, at 1.54 euros per share. Amancio Ortega, the founder and largest shareholder of Inditex, will collect 2 billion 845 million of this money this year.
The power company, led by Ignacio Sánchez Galán, has promised a 17% to 27% increase in dividends by 2026 in its new strategic plan. Specifically, Iberdrola has committed to paying shareholders between 61 and 66 cents per share, compared to the current 53 cents. But the percentage of profits to be paid to shareholders does not change: between 65% and 75%, up to a total of around 11,000 million between 2024 and 2026.
Banco Santander announced last Friday that it will pay shareholders more than 6 billion euros this year between dividends and share buybacks. 9% more More than 5.5 billion distributed according to the record results of 2023.
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These three companies join plans by other Ibex 35 companies looking to buy back or increase dividends after the effects of the pandemic. For example, Meliá proposes to buy back dividend from voluntary reserves The next shareholder meeting on May 9 will reverse this payment, which was canceled in 2019. In the same vein, Cellnex announced that it expects to pay dividends of at least 3 billion euros between 2026 and 2030. IAG plans to reclaim the payment canceled in 2019. dividend “coming soon.” The airline group states that it is working on “creating sustainable value and cash returns for shareholders”, so it is expected to announce a dividend return this year.
Aena will propose to the board of directors ordinary general assembly meeting of shareholderswhich will be held on 18 Aprildividend distribution 7.66 gross euros per share Calculated based on the results of the 2023 financial year, this figure is 61.2% higher than the amount paid in 2022 (4.75 euros gross per title).