Iberdrola enters the Stoxx 50; Santander remains; Telefonica and BBVA leave


Bankinter | Iberdrola will enter the Stoxx 50 index on 23 September. The Spanish electricity company will form part of the Stoxx 50 index which groups together the 50 largest companies in 17 European countries, including Switzerland and the UK.

The change will not take place until the opening of the 23 September session. Santander is the other Spanish company in the index. Iberdrola belongs to another of the major indices in the Eurozone, the Euro Stoxx 50, which groups together 50 major companies in the Eurozone (not including Switzerland and the UK). The Euro Stoxx 50 is the index of reference for a large volumes of funds and ETFs, which replicate it.

Analysis team opinion: Iberdrola shares yesterday marked a new high and the stock market capitalisation of the group exceeds 60 Bn€. The shares are in the model portfolios proposed by the Bankinter analysis team (both Spanish and European) and we have been recommending them all year. The arguments supporting our positive vision are: (i) growth in annual net profits: +6.5% AAGR 2018-2022 supported by new investments in networks and renewables and the application of operational efficiency measures; (ii) financial solidity (Net debt/EBITDA below 4.0X in 2019-20); Geographical diversification; (iv) Growing shareholder remuneration, with minimal annual growth of +3.3% in D/S in 2018-22; (V) attractive returns per dividend: 2.8% in 2019 reaching 4.3% in 2022.

On the other hand, Telefonica and BBVA will leave the Stoxx 50 index on 23 September, although they will remain members of the Euro Stoxx 50.

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