“Gazprom” has twice increased dividends by the end of 2018

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The Board of PJSC “Gazprom”, which held a meeting on 14 may, recommended that the Board of Directors and the General meeting of shareholders of the gas corporations to direct on dividends for 2018 393,2 billion rubles., which corresponds to the 16,61 RUB per share. This is more than twice the historical record of “Gazprom” in the amount of the dividend per share paid by year-end 2017 (8,04 rbl.). The dividend yield on the shares of “Gazprom” at the end of the 2018 financial year will be thus 9%, which will bring Russian gas giant one of the leaders in dividend yield among blue chips.
For example, “Gazprom” dividend yields will be, according to our estimates, a percentage point lower than that of Norilsk Nickel, but higher than the dividend yield of the shares of its subsidiary company “Gazprom Neft”.
Recall that some Western media in late April had published forecasts that dividends “Gazprom” by the end of 2018 will total only RUB to 10.43 per share, only 30% would exceed the size of dividends for 2017, and the dividend yield will be 6.3%. “Gazprom” in any case, increasing the size of dividends on shares, would set a new historical record, but the dividend increase is twice more than compensates for cautious investors all the risks and concerns about sanctions and threats “Nord stream-2”, and now “Turkish stream”.
In the U.S. Congress yesterday introduced a bill on sanctions against European companies involved in the construction of the offshore section of the pipeline, and although the probability of such a law is extremely low, “Gazprom” investors ‘ fears are answered in the best way possible, distributed among the shareholders 20% of annual net profit under IFRS. To pay 50% of net profit while the gas giant does not allow large-scale investment projects, but we do not exclude that when the Corporation will complete the “Nord stream-2”, the first line of “Turkish stream” gas pipeline “Power of Siberia” in China, opportunities to further increase the dividends will be huge.
Shares of “Gazprom” today the leader of growth on the Moscow stock exchange, at the moment they rise in price by 11.7%. However, we reiterate a HOLD recommendation on the shares of the company, as a few days, most likely, the excitement associated with the dividend will fall, and the price of shares of “Gazprom” could fall below our target level of 180 RUB per share.
Natalia Milchakova,
Deputy head of the “Information-analytical center,