Santander: a dividend of 1.5% this Tuesday, backed by a buy recommendation

In the year of the return to the cycle, it is among the best values ​​of the entire Ibex 35, scoring practically 30% on the floor so far in 2021. The entity also has the approval of analysts, that give their titles a buy recommendation. They also give it a 19% upside potential from current levels.

With these guarantees, the bank that will distribute its first interim dividend of 2021 next Tuesday, November 2, for an amount of 0.0485 euros, which offer a return of 1.5%. It is too late to put the value in the portfolio: as of this Friday, October 29, the share is listed without the right to that remuneration. In any case, whoever enters Santander now will be able to pocket the next payment from the bank, scheduled for the month of April 2022, for an amount of 0.045 euros, according to Bloomberg. In this case, the return will be around 1.4%.

The group announced its dividend on September 28, practically coinciding with the lifting of the veto on remuneration for (which at the height of the pandemic recommended entities not to remunerate). That day, Santander made public a notable change in its remuneration policy, explaining that it would deliver part of the dividend in cash (those 0.0485 euros) and the other through a repurchase of shares, a common formula in American companies, but not both in Europe. For the shareholder, the repurchase is a form of remuneration in the sense that these repurchased shares will later be redeemed, which will reduce the number of shares in circulation and, therefore, increase the portion of the capital that is in the hands of each shareholder.

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Specifically, Santander will allocate 40% of its first-half profit to dividends (1,700 million of a profit of 4,205 million), and of those 1,700 million, half will be paid in cash this Tuesday, and the other half will be the one used to repurchase own titles. The buyback is already underway, and, according to what has been acquired so far, 36.17 million shares, for a total amount of around 119 million euros (the program amounts to 841 million euros).

More buybacks

Santander is not the only Spanish company that has imported this buyback formula from the US, which is also used by BBVA, ArcelorMittal, Repsol, Lar España, Vidrala, Miquel y Costas, Aedas Homes and Global Dominion. The latter announced this Wednesday the launch of a new program for the acquisition of its own securities, for approximately 5% of the share capital, and a maximum of 40 million euros.

On the other hand, it plans to approve the proposed dividend of 0.3955 euros at its meeting on November 30, according to the company in a statement sent this Thursday to the National Securities Market Commission (CNMV).

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