The dividend yield of the Ibex 35 will reach 5.05% in 2025, according to expert estimates, which means double the performances currently offered by the 12-month Letters on the secondary market, which amounts to 2.53%. Throughout 2024, the Spanish index has reached a profitability of 5% on different occasions, marking the greatest distance in the last decade compared to the dividend yield of the EuroStoxx. At current levels, the Ibex dividend offers 4.5%.
The performance of the Ibex increases with the correction suffered by the benchmark last Wednesday, when Donald Trump was proclaimed winner of the American elections and the index lost 2.9% in a single day, its worst session in almost two years. This return has reached the highest level since last August and is expected to continue in cresdendo for next year. With For every 250 points given up by the Ibex 35, the dividend yield of the index increases by one tenth.. A movement contrary to that marked by the Letters of a Year in recent months. The average yield on one-year debt reached almost 4% in September 2023. Since last March, when the debt yield reached 3.48%, the drop is almost one point. Since June, the yield has fallen by an average of 20 basis points.
The attractive dividend yield offered by the Ibex 35 is a classic. Comparisons would not be necessary, but if we compare the performance of the national index with that of the rest of its European peers, this statement becomes even greater. The Ibex is, after the Italian market (Ftse Mib), the one which offers the highest profitability by 2025 (see graph). The UK’s Ftse 100 index comes next, with a return of 4.03%, according to data from Bloomberg. The Stoxx 600, EuroStoxx 50, Dax and Cac are between 3.2% and 3.6% for the next financial year.
The common profit of the Ibex 35 is the one that registers the greatest increase throughout 2024, with estimates that have continued to grow since January 1, and it is in fact the European index that is experiencing a largest increase in this direction. Ibexes are already expected to earn more than $67 billion together in 2024which means exceeding the profits of 2023, which have already become historic, with a result of more than 50 billion euros. However, by 2025, Ibex corporate profit growth slows and is expected to increase by 4% compared to 2024, which is the best increase among major European and American benchmarks.
The Spanish market is known for its generosity in terms of dividends, with some companies devoting a large part of their profits to the distribution of remuneration among their shareholders (called payment). Actually, 2023 was the biggest earnings year in four yearssince 2019 when they reached 31.705 million euros. Globally, this topic is also booming in the rest of the globe, and during the second half of the year, an all-time high was reached in terms of global dividends.
Juan Fierro, director of Iberia at Janus Henderson, explained that in the second quarter, the most seasonally important in Europe, “we reached a historic record volume in the region where 90% of companies have increased their dividends or remained stable in year-on-year terms. “More specifically, among the most important markets, Spain and Italy recorded the strongest growth. Spanish dividends increased by 35.4% in interannual terms until reaching 11.5 billion euros ($12.4 billion), a growth rate that stands out with a big difference compared to other countries on the continent such as Germany (-1 .2%), France (6.8%) or the Netherlands (18.3%),” reports the expert.
Juan José Fernández-Figares, director of IIC Management at Link Securities, believes that the dividend of the Spanish index is sustainable over time“and this is reflected in the consensus of analysts that maintains this 5% for 2025 and 2026, since it is supported by the dividends of the banks, Telefónica, Inditex and the profits which together maintain a very high level on the Ibex 35 .
In the same sense, the expert indicates that, although this fact makes investment in the Spanish stock market attractive, the investor must assume that “every time you invest in variable income, you assume a risk that you do not assume, in principle, when you do it in Treasury bonds, because the economic scenario could change for the worse, which would have an impact on the profits of listed companies and, therefore, on their profits, especially in those in the most cyclical sectors, such as banks”, we recall.
In value terms, half of the Ibex 35 will offer a dividend yield above 5% by 2025 (16 companies), with all banks above this figure.
