Dividend season begins in Europe with ten bonds yielding more than 5%. In Portugal, the distribution of ordinary dividends will also reach a new annual maximum, but will not keep up with the pace of profit growth, according to Maxyield.
The earning season for the 4th quarter is coming to an end and the dividend season is on the way, with the Annual General Meetings being held in April and May, which will approve the dividend proposals.
Maxyield – Clube dos Pequenos Acionistas carried out an analysis and concluded that all PSI companies had positive results. This is despite half of the index’s listed companies having lowered profits in the context of IFRS. The global results of PSI companies represent a new annual high, with growth of 6.5%.
“When we calculate Galp in the context of Resource Consumption Accounting (RCA) the overall results grow by 15%”, says Maxyield in its analysis.
“The distribution of ordinary dividends will also reach a new annual maximum, but will not keep up with the pace of profit growth, and generally speaking, dividend yield present a satisfactory level, being well positioned in international comparisons”, adds the association of small shareholders.
O payout it will be below 50%, with several explanatory factors, he adds.
Some listed companies with a relevant weight in profits and dividends, namely Galp and EDP, have pre-defined dividend policies.
It can also be seen that some companies are reducing shares in circulation, due to policies of repurchase and acquisition of own shares, namely CTT and Galp, with an impact on the amount of dividends to be distributed.
On the other hand, says Maxyield, for the 2022 financial year there was a distribution in kind by Altri and an extraordinary distribution by NOS, which are not repeatable.
Earnings per share and respective proposed unitary dividends can be found in the following table, which shows that four companies have reduced shareholder remuneration (Semapa, Navigator, NOS and EDP Renováveis) and two maintain the ordinary dividend (REN and Corticeira Amorim) and 6 raised their dividend proposal (BCP, CTT, EDP, Jerónimo Martins, Galp and Sonae SGPS).
It remains to be seen the proposals of four companies (Altri, Mota-Engil, Ibersol and Greenvolt).
Greenvolt, given the levels of results, financing needs and level of debt, should not proceed with the distribution of dividends, maintaining the practice of previous years.
Overlapping with the dividend season, the earning season will also take place in the months of April and May, with greater incidence in this period, referring to the 1st quarter of the year.
In the months of May and June, dividends will be paid for the 2023 financial year.
These aspects, of undeniable relevance, could influence the evolution of the Portuguese stock market in 2024.
BCP returned to the Stoxx Europe 600 index last year. Thus joining EDP, Jerónimo Martins and Galp.
Dividends in Spain
Several large Spanish companies are listed on the European EuroStoxx 50, such as BBVA, Santander and Inditex, which pay their dividends in April or early May.
Unlike European companies, Spanish companies listed on the stock exchange normally pay dividends several times a year.
An analysis by El Economista reveals that on April 10, BBVA will pay its complementary dividend for 2023, worth 0.39 euros, which yields 3.6%. To receive them, you must purchase shares before April 8th.
The bank is one of the stocks with the biggest rise in the Ibex 35 this year and also one of the biggest in the entire EuroStoxx50, having risen more than 30% on the stock market.
Santander and Inditex coincide in terms of dates. The bank chaired by Ana Botín will also deliver, like BBVA, an additional dividend, in this case of 0.095 euros, on May 2nd. This amount offers a return of 2.1%.
On May 2, the textile giant that owns Zara will pay shareholders 0.77 euros per share, which constitutes its first interim dividend for the 2023 financial year.
Inditex, which has been listed on the stock exchange for 23 years, is currently at historic highs on the stock exchange. Its final dividend is normally paid in November.
Europe: 10 bonds with a dividend yield of more than 5%
The dividend season begins in Europe with ten payments that exceed 5% profitability, according to analysis by El Economista.
The months of April, May and June are traditionally the most prolific in terms of dividends among listed European companies.
In the EuroStoxx 50, the eurozone benchmark index, 42 companies will pay dividends to their shareholders during this period. This year ten of these companies offer dividend yields equal to or greater than 5% and twenty are at a level equal to or greater than 3%.
Dividend Yield measures a company’s dividend yield relative to its share price.
Looking at the highest returns, Volkswagen, BNP Paribas and Mercedes-Benz stand out from the rest.
Volkswagen will distribute a dividend on June 3, which amounts to 9.06 euros per share. The German car manufacturer has risen around 7.6% on the stock market this year, less than the index, which has risen around 12%. Like many other EuroStoxx companies, Volkswagen only pays once a year, so this June payment brings together all the dividend income the stock has to offer. The 9.06 euros are 3.4% higher than the amount paid last year.
On May 23, BNP Paribas pays a dividend of 4.60 euros, i.e., 7.20% profitability. As with Volkswagen, this is your only annual payment and the amount is 18% higher than a year ago. The French bank increased its profit for 2023 by 11.4%, to 10.975 billion euros.
A similar percentage of 7.20% offers profitability to Mercedes-Benz with 5.30 euros per share that will be delivered on May 13th. Once again, this is a single annual dividend, which represents a shy increase of 2% compared to the previous year.
Also German, BASF offers a return of 6.5% with its dividend on April 30th of 3.40 euros, which will be paid to those who keep the shares in their portfolio until the 26th.
This German chemical company has maintained its dividend at exactly the same amount since 2022, and is expected to repeat the 3.40 euros next year. In terms of results, in 2023, the group managed to overcome the previous year’s losses, recording a net profit of 225 million.
The same analysis reveals that automobile manufacturer Stellantis is among the season’s top dividend options. The Italian company will pay 1.55 euros on May 3, an amount that yields 5.8% at current prices. Stellantis increased this one-off annual payment by 16% in 2024, compared to 2023, after achieving a record profit of €18.625 billion last year, 11% above the 2022 figure. at an all-time high, it is one of the best performers in the EuroStoxx 50 in 2024, with an increase of almost 26% in the stock market.
Axa bonds also give a dividend of 1.98 euros paid on May 6th, allowing a return of 5.70%.
Still in the top 5% or higher are BMW, Unicredit, ING and Allianz. The German car manufacturer will remunerate its shareholders with 6 euros per share, on May 20th. They yield 5.7%.
Unicredit bank’s dividend scheduled for April 24 amounts to 1,795 euros, offering a yield of 5.2%. The yield from this payment is limited by the trading levels of the Italian bank, which is the most trending stock in the EuroStoxx 50, with an increase of almost 40% this year, according to El Economista.
ING bank will distribute 0.756 euros on May 3, and the return on this dividend will reach 5.1%.
On May 13th, Allianz delivered 13.80 euros per share to shareholders, which translates into a profitability of 5%.
