What dividends does Prime Transaction expect BSE companies to pay next year?

Fondul Proprietatea (FP) is the only issuer from the Bucharest Stock Exchange (BVB) for which the analysis team from Prime Transaction estimates a dividend with a yield higher than 10% next year, according to the latest report of the brokerage house .

"The fund has an assumed and predictable dividend policy, and if we take into account the amounts received so far in the form of ordinary dividends from the companies in which it has holdings (the largest being from Hidroelectrica) and subtract the expenses detailed in the dividend policy, we arrive at an amount of about 550 million lei distributable in the form of dividends in 2024, equivalent to almost 0.1 lei/share, almost a fifth of the share's market price", the report states.

The estimate of the Prime Transaction team equates to a gross return of 19.6% compared to the price of the FP share on November 29, of 0.51 lei, respectively a net return of 18%, according to the analysis in the attached document.

Hidroelectrica (H2O) currently has the best results among state-controlled issuers, and the company has consistently had high distribution rates. This year, Hidro has allocated 90% of its profit to 2022, to which additional dividends from retained earnings have been added, the report states.

In the case of Hidroelectrica, the Prime team estimates a dividend of 11.7 lei per share, equivalent to a net yield of about 8.4%, compared to the company's share price on November 29.

• 8% yield on Sphera's estimated distribution

From Sphera Franchise Group (SFG), analysts expect a generous distribution with high yield next year. "The dividend policy takes into account distributions of 100% of the distributable profit, and this year the individual distributable profit is higher than the consolidated one, which the issuer usually reports to investors and which we were able to estimate easier," the report states.

The estimated dividend per share in the case of Sphera is 1.84 lei, equivalent to a net yield of 8.3%, compared to the share price on November 29.

For Conpet, analysts estimate a distribution rate of 100%, i.e. a dividend of 6.75 lei per share, with a net yield of 8%, while in the case of Nuclearelectrica, at a distribution rate of 45%, the estimated dividend is 4.14 lei, with a net return of 8%.

In the case of Romgaz, the Prime team anticipates a distribution rate of 55%, i.e. a dividend of 3.52 lei per share, with a net yield of 6.7%.

"Given the State's continuous need for money, we cannot exclude, even this time, higher distribution rates to the companies subordinate to it or even the granting of special dividends. However, after the exemption this year of the majority of listed companies from the obligation to pay 90% of the profit as dividends, it is difficult to estimate where and if we could see such situations", the Prime Transaction report states.

In the case of OMV Petrom, the analysts point out: "Taking into account the dividend policy that implies increasing distributions from one year to the next and the fact that it was applied even in periods with weaker financial results than this year, we expected that from the profit for 2023 to be distributed a dividend higher than the ordinary one distributed from last year's profit (without taking into account the two special dividends)".

Thus, those from Prime estimate that OMV Petrom will allocate a unitary dividend of 0.0425 lei, equivalent to a net yield of 7.2%.

Banks will distribute dividends next year in the optimistic scenario, according to the brokerage firm's analysis team. For Banca Transilvania, a dividend per share of 1.15 lei is estimated, equivalent to a net yield of 4.6%, while for BRD the estimated unit dividend amounts to 1.29 lei, equivalent to a net yield of 7.1%.

"We took into account the optimistic option, in which the bank will no longer be warned by any of the regulators not to distribute dividends, but the margin of error is greater than with other issuers, given the recent history", the report of those from Prime, with reference to BRD.

On the first three places in the top of the issuers outside the BET-BK index, the analysts placed Alumil, with a dividend per share of 0.165 lei, respectively a net yield of 7.3%, Turbomecanica - dividend of 0.021 lei per share, yield of 7 .2% and Transilvania Broker de Asigurare - dividend of 1.48 lei, yield of 6.7%, compared to the share price on November 29.