The Ibex 35 recovered in September with a slight decline: it lost 0.06% during the trading session, closing at 11,395.30 integers. Despite this timid decline, The Spanish stock market’s benchmark index is only 0.4% from its annual maximum (the 11,444 points at which it closed on June 6); and its dividend version is actually trading at unprecedented highs. This is the Ibex 35 Total Return, an indicator that includes in its calculation, in addition to the evolution of the share price, the reinvestment of dividends distributed by companies, as well as other remuneration formulas.
The Ibex 35, like all world markets, had a turbulent August, which began with a real stock market flight (the Spanish index fell by more than 7% between July 30 and August 6). But it has already fully recovered from this collapse: Since the lowest point of this sharp “V” movement, the index has already increased by 9.6%. Today, in fact, it is trading at 1.6%. above the levels that preceded it. It is not the only one to have managed to fill this downward gap; all the major European markets have succeeded in doing so.
In this recovery, the Ibex has been particularly helped by stocks such as Inditex and Iberdrola, which have reached historic highs in the last two weeks. The rise of these two big also has a lot to do with the good performance this year of the total return version of the index: if we look at the listed companies that added the most points to the Ibex 35 Total Return in 2024, in first place is Inditex, which contributed more than 1,200 integers; followed by Santander, which added almost 850; CaixaBank, with more than 840 points; BBVA, with about 690 additional points, and Iberdrola, which added more than 640 points, according to Bloomberg.
Since the Ibex Total Return reflects the effect of remuneration on a portfolio that replicates the Ibex 35, it is common for it to trade above the standard version. According to Felipe López-Gálvez, an analyst at Singular Bank, “we could say that the indices total return are much more accurate in representing the behavior of the stock market,” because when a company distributes a dividend, its share price falls and drags the index down. They would be “an improved version of traditional indices”he adds. On the contrary, other experts believe that in reality, purely price indicators (without dividends) better reflect the behavior of investors, who generally do not reinvest these coupons, but rather use them as additional income.
The vast majority of stock indices are not total return indices. An exception is the German Dax, which includes dividends in its calculation. Since the beginning of the year, the German selection has already regained the upper hand 13%, below the Ibex Total Return (which climbs by more than 16%) but above the Ibex 35 (which scores 12.8%). These revaluations still do not match that of the S&P 500, which this year exceeds 18%. The technology Nasdaq 100, for its part, practically show empathy with a total Ibex return up by more than 16%.
Although it is trading, as they say, close to the annual maximum, the dividend remains the reason for being of the Ibex 35, which continues to offer attractive dividends. Until 15 Selected Titles Offer a Return of More Than 5% with Their Compensation to the shareholder. Particularly noteworthy are Unicaja, which tops the dividend yield ranking with 8.7% with payments due until 2024, according to FactSet; CaixaBank follows with 8.3%; Enagás, with 7.9%, and Sabadell, with 7.7%.
Levels to buy
From the point of view of technical analysis, the indicator was able to close above the minimum of the previous session for 20 days. If this level were exceeded – which was 11,372 points this Monday – there would be more possibilities of seeing future declines. This is what Joan Cabrero, technical analyst and strategist at Ecotrader, the portal, explains. prime of investment strategies elEconomista.es: “If the index were to lose the previous day’s lows at the close of trading, it would be very likely that we would have seen a short-term ceiling and would significantly increase the risk of witnessing a correction of the last and very strong rebound.” The expert warns that “sooner or later the joy we have will be quarantined and that is when the Spanish stock market will have to rise, not now in the middle of a whirlwind of purchases, so until If there is a drop between 11,000 and 10,850 points, I do not consider buying more Spanish stocks,” adds Cabrero.
