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Tuesday, June 28, 2022

Up to 12 public companies pay double dividends as government bonds

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Central banks are determined to fight inflation. If monetary stimulus helped markets regain stability in the toughest moments of the pandemic, now the end of asset purchase programs and interest rate hikes are revealed as the main weapon. But after years of anesthesia, removing the aids is not that easy. The ECB has yet to touch rates, but the announcement that it will proceed with the first rate hike in the euro zone in July sent markets into turmoil.

Neither the stock market nor debt is immune to the effects, but it’s felt most strongly in fixed income securities. Debt yields are extending the rises, a process that has seen the Spanish bond hit 3%, a little off the 0.56% it was at the end of 2021 and a far cry from the -0.017% it was in December 2020 marked. As yields rise, the price falls, but at these levels much more conservative investors are starting to consider the idea of ​​increasing their exposure to government bonds. Although bond yields aren’t at record lows, a dividend yield is a helpful strategy for those looking for more attractive yields and a higher risk tolerance.

Shareholder compensation has always been one of the hallmarks of the Spanish Stock Exchange. The pandemic crisis prompted Spanish listed companies to suspend dividend payments, but the historic recovery in earnings in 2021 has allowed them to resume paying shareholders. In this scenario, the Ibex 35 has an estimated 2022 dividend yield of 4.32%, beaten only by the Italian Mib (5%).

The Spanish Selectives’ dividend yield is above the bond maturing in 2032 and within the Spanish Stock Exchange up to 12 listed companies are paying double the government reference. Metrovacesa in particular stands out. To date, the real estate developer has approved and on May 20 paid 0.6 euros per share against 2021. That coupon has been enough for the company to earn an estimated dividend yield of 11%, almost four times that of the 10-year bond.

Related to the real estate sector are Merlin and Aedas. Led by Ismael Clemente, Socimi is required to distribute 80% of profits among its shareholders. At the expense of the 2021 financial statements, the company has paid EUR 0.40 per share, an amount that is supplemented by a special payment of EUR 0.67 from the sale of the BBVA office portfolio. The estimated dividend yield for 2022 reaches 10.4%. Just a tenth below (10.3%) slips Aedas Homes. The organizer pays out 2.16 euros per share until 2021, an amount that is divided into two. The first EUR 0.82 was paid out on March 31, and the remaining EUR 1.34 per share will be paid out at the beginning of July.

While Mediaset threatens to suspend its dividend if the Berlusconi family’s takeover bid is successful, competitor Atresmedia is using its strong cash flow to reward shareholder loyalty and regain pre-pandemic levels. At the expense of the previous year, the company pays out 0.42 euros (0.24 euros tomorrow). The company is on par with Aedas (10.3%) in terms of dividend yield.

Some members of Capricorn are losing double digits but over 6%. Mapfre (8.7%), Enagás (7.8%), ACS (7.8%) and BBVA (7.4%) shine in their own light. Banks are beginning to abandon the scrip dividend strategy. The panel led by Carlos Torres is one of them. It paid EUR 0.31 per share from the 2021 accounts, the highest cash payment in the last 10 years.

The list is completed by Logista (7.6%), Línea Directa (7%), Telefónica (6.6%) and Prosegur (6%). Telekom paid the second tranche (0.15 euros) of the dividend for 2021 last week, the last remuneration for which it uses the flexible dividend.

The most attractive European companies

listed. Although Spanish listed companies manage to sneak in with the shareholder in the most generous European firms, up to three European securities pay more than triple the Spanish reference at 10 years and more than 35 double. Telenet in particular stands out. The largest provider of broadband services in Belgium has a dividend yield of 11.7%. One step below are the Spanish Socimi Merlin (10.4%) and the automotive group Stellantis (8.8%).

banks. In the list of the most generous stockholder values, banks are mostly habitual. Among the companies with the highest dividend yields, France’s Crédit Agricole (8.4%), Italy’s Intesa Sanpaolo (7.9%) and Mediobanca (7.6%) stand out. Not far behind is BBVA (7.4%) along with France’s BNP Paribas (7.3%) and Dutch ING (7.3%).

Source elpais.com

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