Last week it started with new features in Naturgy’s roadmap after a turnaround focused on reinforcing shareholder remuneration at the cost of executing fewer investments. The gas company has decided to increase the dividend payment by 12% in the 2021-2025 period, which in practice means increasing the money allocated to this item by 700 million to 6,600 million. In this way, it sets a floor of 1.4 euros per title to be distributed among investors from the previous 1.2 euros, conditional on maintaining a ‘BBB’ rating by S&P.
The first payment on account of the 2023 results will be paid on August 7, when the gas company will make a payment of 0.5 euros per share. Although there is still a week to go, it represents a disbursement for the group of almost 485 million, a figure that will be deducted from Naturgy’s capitalization, which increased to 27,000 million. Investors in this coupon have until Wednesday, August 2 to subscribe for Naturgy shares and qualify for this payment.
Despite the fact that the ‘pay-out’ ratio (percentage of profit distributed among Naturgy shareholders) is one of the highest among Ibex 35 companies, set at 85% to which it committed in July 2021, when compared to other values in the index, is one of the least generous. The firm run by Francisco Reynés yields a dividend yield of 4.6% and is thus placed in the lower part of the classification, in line with Colonial (4.59%), Iberdrola (4.57%) or Sacyr (4 ,4%). The yield contrasts with that offered by Enagás, which leads the list with 10.5% and is crowned as the most profitable company in the selective in terms of dividend.
The reason for these percentages is based on the evolution of the stock market. While the manager of the Spanish gas system accumulates a modest revaluation of 6.25% in the year, in the case of the former Gas Natural Fenosa the accumulated rebound rose to 14%, hence the return for the shareholder is lower. Analysts argue that the dividend is one of Naturgy’s main spearheads in the eyes of the market, a factor that explains the investor interest, despite the low volume of free float, known in jargon as ‘free float’.
This term refers to the number of shares that can be traded in a certain company and that in the case of the aforementioned group barely reaches 135 million titles, that is, 14% of the capital. The remaining 86% is in the hands of Criteria Caixa, its main shareholder with 26.7% of the capital, the CVC fund (20.6%), Global Infrastructure Management (20.7%), as well as the Australian fund IFM, which is reinforced and reaches 14.5%, as stated in the financial report of the energy corresponding to the first semester.
The Number of Shares in circulation will be even lower at the end of next week, when the Record Repurchase Program leads to alvar; July and August 4 with the objective of obtaining a maximum of 370,000 titles. According to the records of the National Securities Market Commission (CNMV), it has already acquired more than 147,000, equivalent to 0.015% of the capital for almost four million euros.
Analysts are critical of Naturgy and consider that it is very expensive to pay on the stock market. With a capitalization of around 27,000 million, the ‘Bloomberg’ consensus considers that it is trading more than 9% above what it should. Thus, you should believe that the stock is moving at 25.21 euros, below the 27 euros it is currently at. On this aspect there is unanimity among investment banks, which makes it the only firm on the Ibex 35 that does not have any buy recommendation. Only 33% advise keeping, despite correcting just over 7% from five-year highs of 29.9 euros.
