Share repurchases as a formula to remunerate the shareholder are consolidated within Spanish companies. These programs gained strength last year in the midst of the debacle that equities were going through, an evolution that has continued this year, especially among the banking sector. In the last year and a half, entities have stepped up the accelerator in order to seduce investors and complement the dividend with an ‘extra’ reinforcement of the price. After the season of semi-annual results, BBVA and CaixaBank have been the ‘Ibex banking’ firms that have rushed to launch a new plan of these characteristics.
Specifically, the entity chaired by Carlos Torres plans to allocate 1,000 million to the purchase of its own titles, which are added to the programs previously established in order to dispose of its excess capital, while the group led by Ignacio Goirigolzarri will use 500 million within the framework of its 2022-2024 strategic plan, which has set itself the goal of generating value for its shareholders of 9,000 million euros in this period. A way of propping up the price, which in the first case still corrects 5.5% from annual maximums, up to 7 euros per title, while in the second it is listed at 3.64 euros and is just over 11 % from 2023 peak, net of dividend payment, which is subtracted from capitalization.
They thus join the plans previously announced by firms such as Santander or Sabadell, which is immersed in the purchase of titles, of which it has already executed just under a third. His intention is to get up to a tenth of the share capital. “These programs represent additional remuneration for the investor,” says Rafael Alonso, a financial analyst at Bankinter, to stress that the buybacks make sense when they are launched in “mature” sectors and that are cheap on the stock market, for the sake of ” improve shareholder profitability”, which is why Alonso considers that certain conditions must be realized for it to make sense.
Within the framework of the requirement that it be a company that carries out its activity in a consolidated area, there is Repsol, which has taken advantage of the presentation of its half-yearly balance sheet to announce that they plan to reduce capital before the end of the year with the amortization of 60 million treasury shares, equivalent to 4.7% of the capital. This would be added to the 50 million shares canceled in June. The circumstance arises that the oil company suffers annual losses on the stock market after its shares have fallen by 7.7%, to 13.7 euros, appearing as the fourth value of the Ibex that falls the most so far this year .
The list of the latest new buybacks announced for this year is completed by Rovi, which has spurred the share price after announcing that it will take over 5% of the capital, and its share price has risen in the last week to 44 euros, which translate into a 22% revaluation in the annual computation. The ‘acceleration’ makes it the second of the four quoted values that rises the most in the year, only behind BBVA (+24.25%), while CaixaBank aligns with the energy company and falls 0.44% after the fall of this Tuesday. “More and more investors are recognizing its benefits”, precisely Antonio Aspas, a partner at Buy & Hold Capital, alluding to this formula that is more established in countries like the United States or in some European countries in which the acquisition of shares has a relevant weight in market capitalization.
Repurchases triple their volume in ten years worldwide
Overall, from the information collected by Janus Henderson, it can be deduced that the purchase of own shares has more and more companies worldwide. During all of 2022, the global import of these amounted to 1.3 trillion dollars (around 1,400 million euros), 22% more year-on-year. This means tripling the value registered in 2012, a growth that contrasts with the 54% increase in dividends distributed in the same period. In fact, the study yields another revealing data and that is that the repurchases almost equaled in importing the payment of dividends, which stood at 1.4 trillion dollars (around 1,500 million euros).
Despite this, the report establishes large sectoral differences, since in areas such as public supplies, the dividend yield is higher than buybacks, while in technology such as Alphabet, Google’s parent company, or Meta, owner of Facebook , compensate their investors through this tool. In this sense, Apple stands out, which is considered the world’s largest buyer of its own shares with a plan valued at 89,000 million dollars (around 97,000 million euros). Despite this, Ramón Alonso warns that this figure must be taken with tweezers, after the company has assaulted the three trillion capitalization. In any case, among the ten companies that register a higher volume in this sense, nine are ‘made in the USA’. The other was the British Shell.
