Dividends continue to attract attention in the Spanish equity market. In 2023, the Ibex 35 companies distributed a total of 30.295 million euros to their shareholders, marking a 19% rise from the previous year and approaching the peak distributions seen at the start of the last decade, according to the market operator Bolsas y Mercados Españoles (BME).
The Ibex 35 record shows a dividend yield of 4.1%. In practical terms, this means that the average shareholder earned a dividend equal to 4% of the share price each year, thanks to the cumulative effect of regular distributions. That level of yield also outpaced inflation, which remained at 3.1% for the year, while headline inflation, which excludes energy and fresh foods, settled at 3.8%. The 10-year Spanish government bond yield stood around 3.17% during the year, underscoring the appeal of equities with solid shareholder remuneration in a macro context of moderate inflation.
Shareholder remuneration is a key factor for many investors tracking the Spanish market. A number of Ibex 35 firms managed to surpass the CPI through dividends, even as inflation fluctuated around February’s 2.8% reading. Notable leaders in dividend yield include Enagás at 12.9%, Endesa at 12.5%, Telefónica at 7.9%, Mapfre at 7.4%, Naturgy at 6.85%, Acerinox at 6% and Logista at 8%. The February data from BME highlights how dividend policies can outpace price movements, contributing to a higher total return for shareholders despite some price declines. In fact, 23 Ibex 35 companies have delivered dividend gains that exceed inflation on a cumulative basis so far in the year.
It is important to note that dividend yield is a ratio that combines the payments made to shareholders with the company’s share price performance over the past year. If a stock falls while the dividend remains steady, the yield naturally rises. This can mask underlying financial or operational weaknesses, so investors should examine ratios such as payout, cash flow generation, earnings per share, and debt levels to get a clear picture of sustainability and risk. For example, Enagás showed a year-on-year decline of 11.7%, Endesa fell 10.2%, Naturgy declined 26.9%, and Acerinox dropped 4%, while several other Ibex 35 constituents improved their performance so far in the year.
Beyond yield, investors monitor other metrics related to shareholder returns, including the proportion of profits paid out as dividends and the cash flow available for distributions, along with earnings per share, debt load, and the trajectory of past shareholder compensation.
Ibex 35 majors lift dividend expectations
In the same week, Iberdrola and Banco Santander announced dividend increases that tracked the larger raise seen at Inditex following its strong results. Inditex plans to pay about 4.8 billion euros to shareholders this year, at roughly 1.54 euros per share. Amancio Ortega, the founder and largest shareholder of Inditex, stands to receive roughly 2.845 billion euros from this payout in 2024.
Iberdrola, the power company led by Ignacio Galán, has signaled a broader boost in dividends between 2024 and 2026, with annual payments projected to rise by 17% to 27% driven by its updated strategic plan. Specifically, Iberdrola aims to distribute between 61 and 66 cents per share, up from the current 53 cents, while maintaining a payout ratio in the 65% to 75% band. This targets roughly 11 billion euros in distributions across 2024–2026, illustrating a long-term commitment to shareholder returns.
Banco Santander followed with a strong message, announcing plans to return more than 6 billion euros to shareholders this year through a combination of dividends and buybacks. With over 5.5 billion euros already distributed in line with 2023 results, the bank’s approach reinforces the trend of enhanced returns among large Spanish lenders.
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These moves join initiatives by other Ibex 35 members seeking higher dividends or buybacks after pandemic-related pressures. For instance, Meliá is considering a dividend from voluntary reserves, with a forthcoming shareholder meeting on May 9 scheduled to reverse a cancellation from 2019. In parallel, Cellnex has signaled a plan to distribute at least 3 billion euros in dividends between 2026 and 2030. IAG has proposed resuming a dividend after a 2019 pause, signaling a renewed emphasis on cash returns. The airline group has indicated that it is focused on creating sustainable value and cash returns for shareholders, with an expected dividend announcement this year.
Aena is set to present a proposal to the board for the ordinary general meeting on April 18, proposing a dividend of 7.66 euros gross per share, calculated on the basis of the 2023 financial year results. This figure represents a 61.2% increase from the 2022 dividend of 4.75 euros gross per title, underscoring a renewed emphasis on shareholder remuneration as part of the company’s overall performance reporting.