Leaders of the pack are national grid company Transelectrica (TEL.RO) and pipeline system operator Conpet (COTE.RO), which can afford a dividend yield of more than 10%, according to ZF estimates.
“Transelectrica and Transgaz (TGN.RO) appear to have the highest dividend yields, as the two will have very good results in 2014 because of the tariff increase. At a distribution rate of 70%-75% of the profit, net dividend yields stand at 10% to 11%,” believes Daniela Ropota, Intercapital Invest analyst.
The record profit and the generous dividend payment policy make Transelectrica the most likely to reward investors, according to a ZF analysis. The rise in transmission tariffs and the decline in spending helped the company beat any previous profit record nine months into 2014, ending January-September with 303 million lei (EUR68 million) net profit, more than double the previous year.
At a profit distribution rate of 81%, the same as in 2014, Transelectrica could afford to give its shareholders a gross dividend of RON4.18 per share or 14% of the latest Transelectrica stock price of RON28.9. Last year, it paid RON2.28 per share at a 10% yield.
Second highest estimated yield comes from oil pipeline operator Conpet Ploiesti, which might pay shareholders up to RON5.89 per share, a 10.6% yield at the latest price on the market. Its net profit went up surprisingly by 21% in the first nine months of 2014, reaching RON48 million, while its shares rose by 22% last year.
Third in this yield ranking is gas pipeline operator Transgaz, one of the stars of the stock market last year, which posted RON374 million profit in the first nine months of 2014. If the distribution rate remains the same as last year, 61%, Transgaz could pay RON24.2 gross dividend, which means a 9.5% yield. Given last year’s record profit, Transgaz might set the distribution rate even higher, at 85% for instance, like the other state-run energy companies. Its investment needs might make it keep a higher share of the profit for itself in the future, though.
“Transgaz and Romgaz (SNG.RO) would be the most attractive in terms of yield if they kept the distribution rate of last year, but there’s the risk of it being lower at Transgaz this year. Transgaz’s chief executive told analysts during the latest meeting that investment needs were quite high,” said Adriana Marin, chief analyst of Ipopema Securities.
“The rather high profit in 2014 can justify a distribution rate towards 85% but the risk of having it cut is greater as of 2015. On the other hand, Transgaz has net cash so in theory it could borrow money and finance some of its investment program.”
Intercapital Invest’s Daniela Ropota also expects 6%-7% dividend yield for Romgaz and Nuclearelectrica (SNN.RO), as well as 5% for Electrica (EL.RO).
After its first year on the stock market and a RON306 million net profit in January-September 2014, Electrica might pay RON0.93 dividend, according to ZF’s calculations. It promised investors an 85% profit distribution rate, higher than when it was fully state-owned.
OMV Petrom (SNP.RO) shares might provide a 5% dividend yield, even though the net profit of the oil company fell due to the slump in oil prices in 2014. Petrom shares lost 13% last year and the decline continues.
“After the latest price corrections Petrom shares are attractive but the current situation is not favorable. They will most likely draw the attention of investors again once the oil prices stabilize,” Intercapital Invest’s analyst says.
(English version by Loredana Fratila-Cristescu)