Ibex 35 Dividends | Seven Ibex 35 companies double inflation with their dividend yield

He dividend It continues to be a good lure in the Spanish stock market. In 2023, those listed on the Ibex 35 distributed among their shareholders 30,295 million, which is equivalent to an increase of 19% compared to last year and a value “already around the annual maximums that occurred at the beginning of the last decade,” says the stock market operator Bolsas y Mercados Españoles (BME).

The dividend yield of the Ibex 35 was 4.1% at the end of 2023. “This means that, on average, each share in the Spanish index gives a dividend equivalent to 4% of the price of that share. Or what is the same: each year that shareholder will have generated a 4% return thanks to the collection of dividends,” they explain from Mapfre. That 4.1% means beating inflation, which closed the year at 3.1%, while the underlying inflation – which does not take into account energy or fresh products – ended at 3.8%. The average CPI for 2023 was 3.55%. The same happens with the Spanish ten-year bond that currently has a yield of 3.17%.

Such is the importance of shareholder remuneration in the Spanish stock market, which seven Ibex 35 companies they turn to the current inflation (February CPI: 2.8%) with its dividend yield. Enagás is the leader in this aspect with a dividend return of 12.9%, followed by Endesa with 12.5%, Telefónica with 7.9%, Mapfre 7.4%, Naturgy 6.85%, Acerinox 6% and Logista 5.8%, according to data at the end of February from BME. The increase in shareholder remuneration and the fall in prices means that 23 listed companies in the national index have already managed to beat the CPI with their dividend.

It should be taken into account that the dividend yield is a ratio closely followed by the market that relates the company’s payments to its shareholders in the last year and the share price. The percentage increases if the stock falls and the dividend is maintained, so It is necessary to see if a very high return does not hide behind a poor financial or operational situation. For example, Enagás has accumulated an annual drop of 11.7%, Endesa of 10.2%, Naturgy of 26.9% and Acerinox of 4%, while the other three companies have advanced so far this year in the Ibex 35. .

Shareholders are also watching closely other financial ratios such as the ‘pay-out’, which is the percentage of profits that are distributed in dividends, in addition to cash flow generation, earnings per share (EPS), financial debt and historical shareholder remuneration.

The majors of the Ibex 35 raise the dividend

This same week Iberdrola and Banco Santander announced dividend increases in response to the increase in remuneration to Inditex shareholders of 28% after historic results. The fashion firm will pay 4.8 billion to its shareholders this year, 1.54 euros per share. Of that money, founder and largest shareholder of Inditex, Amancio Ortegawill collect 2,845 million this year.

The electricity company led by Ignacio Sánchez Galán promised a dividend increase of between 17% and 27% until 2026 in its new strategic plan. Specifically, Iberdrola committed to paying its shareholders between 61 and 66 cents per share, compared to the current 53 cents. The percentage of its profit destined to remunerate its shareholders does not change, however: between 65% and 75% up to a total of around 11,000 million between 2024 and 2026.

Banco Santander, for its part, announced last Friday that it will remunerate shareholders this year with more than 6,000 million euros between dividends and share buybacksat least one 9% more than the 5.5 billion distributed against the record results of 2023.

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These three companies join the plans of other Ibex 35 listed companies that seek to recover the dividend after the effects of the pandemic or increase it. For example, Meliá has proposed recovering the dividend from voluntary reserves at its next shareholders meeting on May 9, which would recover this payment that was canceled in 2019. Along the same lines, Cellnex has announced that it expects to pay at least 3,000 million of euros in dividends between 2026 and 2030 and IAG plans to recover the dividend “soon.” The airline group points out that it works on “the creation of sustainable value and cash returns for the shareholder”, which is why it is expected to announce the return of the dividend this year.

Aena will propose to the board ordinary general meeting of shareholderswhich will be held on April 18ththe distribution of a dividend of 7.66 gross euros per share charged to the results of fiscal year 2023, figure 61.2% higher than that paid in 2022 (4.75 euros gross per title).

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