Bankinter | In an interview at the Davos Forum, the company’s chairman Ignacio Galán said that “it is perfectly possible to grow and pay a higher dividend every year”. He considers the commitment to the dividend and the profitability of the 350,000 small investors who are Iberdrola shareholders to be a priority for the group.
Galán anticipates that the demand for electricity will grow in the coming years as growth industries will need more electricity and to this must be added the electrification of transport and domestic uses in heating and cooling. And to make this possible, it is essential to have a good grid infrastructure.
In his opinion, the electricity sector has not experienced the kind of dynamism that has been taking place in the last fifty years. Iberdrola has the size, strength, diversification, talent and access to resources and first-class partners to take advantage of this situation.
Opinion of the Bankinter analysis team: Good news. The group’s chairman reiterates a positive view of the group’s growth and commitment to shareholder remuneration. At current prices, the dividend yield is 4.9% by 2025. Future dividend growth will be in line with earnings growth.
The 2026 Strategic Plan envisages an average mid/high single digit growth in EBITDA and this growth can be passed on to the dividend. IBE is a clear winner in the process of further electrification and rapid decarbonisation facing the new energy model. Its positioning in renewables and grids, geographic diversification and solid financial structure allow it to capture the opportunities in the new energy transition scenario. Iberdrola is in our model portfolio of Spanish and European stocks.
