Last call for dividends on the Bucharest Stock Exchange: Large companies offer gross yields between 4% and 8%
Over 30 companies listed on the Bucharest Stock Exchange’s main market will pay dividends to their shareholders from the net profits recorded in 2020. The gross dividend yields go as high as 20% for several smaller companies, while some large blue-chip companies offer yields of between 4% and 8%, based on the current market prices.
For the investors who bought shares in these companies last year or at the beginning of this year, the yields are even higher, considering that the BET index is up over 18% year-to-date and 38% year-on-year.
For several companies, the dividends are just around the corner. For example, Wednesday (May 12) is the last day when investors can buy OMV Petrom (SNP) shares to benefit from dividends. The company will start the payments to shareholders on June 7. OMV Petrom is also the most generous of the big companies on BVB this year as it pays a gross dividend of RON 0.031 per share (6.6% dividend yield), similar to last year, despite its profit shrinking in 2020 amid the pandemic. However, the company decided to distribute its full profit and some of the reserves from previous years to keep shareholders happy.
This is not the case with all companies on BVB. Some large state-controlled companies have significantly reduced their dividends compared to previous years as they are also expected to make significant investments this year. Still, some of them still pay attractive dividends. Power producer Nuclearelectrica (SNN), electricity distributor Electrica (EL), and gas producer Romgaz (SNG) offer gross dividend yields of over 5.4%. Meanwhile, gas transporter Transgaz (TGN), pays a divided representing only 2.8% of its share price, significantly lower than in previous years. Power grid operator Transelectrica (TEL), which proposed a dividend yield of around 3%, had its proposal rejected by the majority shareholder, which called for a new general shareholders’ meeting and implied that the company should pay higher dividends. Oil pipe operator Conpet (COTE) pays the highest dividend in the energy sector with a yield of 7.3%.
Four companies offer dividend yields of over 10%, but these are all exceptions. For example, Rompetrol Well Services (PTR), which offers a dividend yield of almost 20%, has been asked by its majority shareholder to also distribute part of its cash reserves from previous years along with the regular dividend from the 2020 profit. The Orsova shipyard (SNO) is in the same situation. Meanwhile, industrial group Teraplast (TRP) and pharmaceutical distributor Remedia (RMAH) both recorded one-off profits from large asset sales, which they decided to distribute to their investors. Both companies offer dividend yields of over 15%, but it’s unlikely these will repeat in the next years.
Meanwhile, there are also some companies that reduced their dividends or cut them altogether. The two large listed banks – Banca Transilvania (TLV) and BRD – are such examples. Banca Transilvania decided not to distribute cash dividends from last year’s net profit, but only free shares, so as to capitalize most of its profit. Meanwhile, BRD opted for a very low dividend. The banks follow prudential recommendations from the European and local regulators amid the challenging market context, but they could resume regular dividend payments in the next years.
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