Dividends from the Spanish stock market as an investment option

<>One of the strategies that the most defensive investors start from is through companies listed in Spanish equities that grant their shareholders the distribution of a remuneration for their profits. They are known as dividends, and that They are constituted as a way of obtaining a fixed income within the variable. It is that simple, but at the same time as complicated as you are going to check if this is your profile as an investor.

Pero ahora, ¿es recomendable comprar un valor cotizado por el mero hecho de distribuir dividendos entre sus accionistas? La solución dependerá del perfil de inversor que tengas. No es sorprendente que los más conservadores sean los más propensos a usar esta strategy en su inversión. Inclusive can help protect you from future losses. This is because, meanwhile, you are receiving a return on your savings of about 5% each year. And that in any case it can compensate (or amortize) the capital gains generated by the formalization of the operation.

Another relevant aspect that you should pay attention is that the dividend they give you is deducted directly from the share price. No es un regalo en absoluto. Aún cuando suele recuperarlo tras unas pocas sesiones de negociación, aún cuando este procedimiento no está garantizado en los mercados financieros. Sea cual sea el caso, lo que te generará es que tengas más liquidez en tu cuenta corriente, que es donde irán estos pagos que otorgan las compañías cotizadas en renta variable. E inclusive reinviértelo, si ese es tu deseo.

Characteristics of dividend distribution companies

Not all make this distribution of their profits, but only those that are corporately consolidated and have a more decisive role in the national stock index. It will be convenient for you to know them, in case your strategy to make the savings profitable goes through this model. And that unlike other companies, they contemplate a series of qualities that are always presentand that makes them very visible to buyers.

• They are large-cap companies, and which have a very notable specific weight on the Spanish Stock Market. Many securities are exchanged in the same trading session and, whatever the case, above all other securities.
• They come from almost all stock market sectors, practically without exclusion: banks, insurance companies, construction companies, telecommunications, energy companies, consumer goods, etc.
• They have very stable business models, which have been successfully developed in the markets for many years and thus have trusted by all investors, both institutional and retail.
• The periodicity of dividends is not uniform, since they are developed with a great plurality: annual, semi-annual or quarterly, depending on their remuneration policy, and can be selected by savers based on this contribution.
• All the blue chips of the Spanish Stock Exchange, in other words, the most representative, make these payments effective, without exclusion, with the only difference of its amount.
• The companies that make these payments on account They are generally the object of the attention of large investment fund managers., which usually include them in their model portfolios.
• They are securities very likely to attract the money of small and medium investors looking for a guaranteed reward for your savings, and generally on a regular basis.
• Your quotes they move under greater stability in their prices than other securities, and without showing much volatility in them. Not being very suitable for speculators.

Strategies for small investors

With this class of companies, retailers often have several strategies to channel the return on their assets. They are not always the same, and it will depend a lot on your conditions as an investor. One of the most widespread is based on taking positions (buying) in these companies in the weeks prior to the distribution of this remuneration.

On one side, they promise you that you will receive a dividend, and on the other, you will take advantage of the greater stability in the quotation of their prices. This is because purchases are often imposed on sales in the weeks prior to the award.

Another strategy used by savers is to to create a savings fund for the next few years, regardless of what your contributions indicate. From this dynamic, they promise a small capital each year. And that given the current conditions of the main banking products (deposit, promissory notes, bonds, etc.), it is the most important source of profitability available at the moment.

Fixed-income products, and as a consequence of the cheaper money of the European Central Bank (ECB), are no longer so profitable. Not in vain, its performance is going through one of the worst moments in recent years, below the 1% barrier. While through dividends you can easily get an interest from the 5%.

Faced with this scenario that is presented, there are many traditional investors who, being invested in banking products intended for savings, have directed their interest towards the companies that develop these payments. And that you can even make operations profitable through its listing in the financial markets, as long as its evolution accompanies you.

How much do these companies distribute?

The year that has just started comes with bread under its arm for shareholders, given that companies have increased the remuneration to their shareholders by almost 2%. And what is more, Several members of the Ibex-35 will offer a dividend yield higher than the 5% during the next twelve months: Enagás, Telefónica, Iberdrola, Red Eléctrica, EBME and Repsol, among the most important.

The electricity sector will continue to be one of the most generous with shareholders in 2016. To the detriment of the banking sector, which has seen this remuneration reduced in recent years, as a result of the adjustments they have had to undertake to clean up their income statement.

Si tu intención es decantarse por este modelo de inversión, seguro que no faltarán ofertas en los próximos meses. Su calendario está lleno de propuestas de estas características, y que se moverán con rentabilidades mínimas desde el 1%, y con un target máximo de hasta el 8%. Inclusive You should not limit yourself to national companies, but you can go outside our borders to look for possibilities. in this group of stocks, with equally generous returns, mainly those of the old continent stocks.

In spite of everything, if you want to opt for an investment strategy in which dividends are present, you must always keep in mind the new taxation that has been applied in Spain since 2015. And that is possibly not very favorable to your interests, by eliminating the exemption of the first 1,500 euros collected in dividend.

This in practice will mean that in your next Income Statement you will have to pay from the first euro that you introduce for this concept. From this perspective, you must assess whether you are interested in hiring them or not, and whose decision will depend on other variables that you enter in the tax document: deductions, income generated, equity, etc.

Some Tips for Examining Your Hiring

The final decision on whether to subscribe to this class of securities will be solely yours, no one else. First you must diagnose your profile as a saver, the aspect you want to give to your investments, and very fundamentally the target term: low, medium or high. And based on these variables, decide which is the best investment model. And it can be this. Even when always keeping in mind the following considerations

1. If you are an investor with very short terms of permanence, it will be better that you renounce these operations, since para ser rentable deberás de tenerlos en tu briefcase durante varios años.
2. If you verify, once the dividend has been distributed, that the shares return to their previous prices, it may be time to close the positions. bring dividend earnings to your checking account.
3. Through this very special strategy you can have a fixed income every year, that complement the ones you usually have month after month, and that can even favor you to give yourself a little whim.
4. If you opt for the flexible dividends provided by some companies, you will also have the possibility of reinvesting this income in the company, through new actions. With which, the return on your investment will be greater.
5. The most speculative investors, including They can take advantage of price increases in the weeks prior to the distribution of the dividend, closing their positions with capital gains, even when logically without receiving this remuneration.
6. The growth expectations will go regardless of the granting of this remuneration, and probably a company that does not apply this payment policy, will be in a better disposition to go to higher quotas in the quotation, and in this way, more beneficial for its interests.
7. And now you just have to select from a wide and diversified offer offered by companies that are listed on equity markets, both national and foreign. With proposals of all kinds, regarding its execution and the periodicity of its payments.