What dividends does Prime Transaction estimate for BVB companies next year?

Fondul Proprietatea (FP), Sphera Franchise Group (SFG) and Evergent Investments (EVER) are the issuers that Prime Transaction analysts expect to have the highest dividend yields in the BET-BK index next year, according to the attached analysis report.

For FP, Prime estimates a dividend of 0.05 lei per share, equivalent to a net yield of 15% compared to the fund's share price on November 29, of 0.307 lei. "According to the Fund's dividend policy, cash distributions must be at least 0.05 lei per share, a situation that has not changed after the sale of the stake in Hidroelectrica. Our estimate is at the minimum stipulated in the dividend policy, but it is not excluded that we could see a slightly higher dividend," the report states.

In the case of Sphera, analysts expect a dividend per share of 3.45 lei, with a net yield of 8.5%, compared to the share price at the end of last month. "Sphera continued to report very good results, and this year it moved to second place in the top of estimated dividends (...). The operator of the KFC, Pizza Hut and Taco Bell networks has a generous dividend policy, distributing the entire individual profit to dividends", according to the report.

For Evergent Investments, Prime's estimate is 0.12 lei per share, with a net yield of 7.9%. "Evergent is one of only two former SIFs that still routinely distribute dividends. The high profit in the first nine months of the year, together with the fairly stable dividend policy", the material shows.

• "The potential yield of Hidroelectrica's dividend is quite high, given that distributions usually approach the level of 100% of profit"

Analysts expect a dividend of 9 lei per share from Hidroelectrica, with a yield of about 7%, compared to the share price at the end of last month. "The potential dividend yield is still quite high, given that distributions usually approach the level of 100% of profit. In the current context, there is also the possibility of a profit distribution rate towards higher dividends or even an additional dividend, but it is difficult to estimate the probability of such scenarios," the report says.

For Romgaz, Prime expects a dividend of 0.375 lei, with a yield of 6.9%, in the case of OMV Petrom the estimated dividend is 0.045 lei, equivalent to a yield of 5.8%, while for Nuclearelectrica the forecast is 2.475 lei, with a net yield of 5.7%.

"In the case of the natural gas producer, the degree of uncertainty increased after last year it distributed only about 20% of its net profit to dividends, compared to more than 50%, as it had been used to in the past. For this year, we estimated a return to 50%, but it is possible that this variant will ultimately prove optimistic. For Nuclearelectrica, we remained at the same rate as last year, although the electricity producer has larger investments to make than the gas producer. And in this case, it is possible that the estimate is optimistic," write those from Prime.

Regarding OMV Petrom, analysts point out that the oil and gas producer has assumed the granting of increasing dividends every year, and in the recent period this has also been accompanied by the granting of additional dividends. This year, we estimate that no additional dividends will be granted, but the regular dividend should remain increasing", according to Prime.

From BRD-Groupe Societe Generale, analysts expect a dividend of 1.06 lei, with a yield of 5.4%. "BRD has volatile distribution rates, combined with the fact that in recent years it has happened several times not to distribute dividends on the recommendation of the NBR, then to return the following year with a higher distribution. Under these conditions, the risks associated with the dividend estimate are higher than for other issuers", the report points out.

For issuers outside the BET-BK index, the Prime Transaction team expects high-yielding distributions from Turbomecanica, with an estimated dividend of 0.036 lei and a net yield of 8.3%; Alumil, with a dividend of 0.21 lei and a yield of 7.8%; and Oil Terminal, with a dividend of 0.008 lei and a yield of 6.1%, compared to the share price at the end of last month.

"We have not taken into account speculative scenarios such as additional dividend distributions at state-owned companies. Given the precarious situation of public finances after the 2024 election year, this possibility is greater than in the past, but issuers are no longer in as good a financial situation as they were six or seven years ago, and in the meantime, governments have refined new methods of extracting money from the companies they control, mainly through taxes, fees and contributions of various kinds," Prime also writes in the report.