The Russian stock market: Where to catch the dividend yield?

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In late may, the Russian stock market will begin the season of dividend – the company will close the register of shareholders on payment of dividends, 1-2 weeks after cutoff the money will come to investors ‘ accounts. Dividend yield number of securities is 7-10%. It’s above the current yield on ruble deposits and inflation, which further attracts investors.
Most of the clipping occurs in June. While most companies boards of Directors have already given their recommendations on amount of dividends. Much ADO caused a small Director of “Tomsk distribution company”, recommending a dividend of RUB 0,0075 per share. This is less than 10% of net profit stated in the company Charter. This could create an unfavourable precedent in the electricity sector (on the background of this news it was volatile), but in the future the dividend amount adjusted in accordance with the Charter.
The intrigue on the dividend is stored in MMC Norilsk Nickel, FSK “UES”, “Surgutneftegas”, “Gazprom” (the latter will declare a dividend tomorrow), but the surprises in these papers are unlikely.

More dividends – higher the demand

Securities with high dividend yields in the coming weeks will be in high demand. But a lot of money on them will not work, because after the cut-off most of the stocks will fall by the dividend amount. At the same time, the time after the cut-off – possibility to buy interesting dividend history at an attractive price.
The dividend season is 2018 starts now. In our opinion, it is appropriate to include in the portfolios of securities, which may increase the dividends by the results of 2018 and in the future, and it is: “Raspadskaya”, “Yunipro”, “MTS”, “Children’s world”, “VTB”. Raspadskaya at the end of 2017, declined to dividends, but may switch to payments in the future. In favor of high-yield “MTS” – the position of the majority shareholder AFK “System” in need of cash. “MTS” in this case will act as a “cash cow” for the development of other projects of the holding. In a similar role can be and “Children’s world”.
Another promising paper “Surgutneftegaz” AP. Dividends on this paper largely depend on the revaluation of foreign currency potbelly “Surgutneftegaz” and not from the operating activities of the company. By the end of 2016, the company has disappointed many shareholders, the dividend on the background of strengthening of the ruble made a modest 60 cents per preferred share. By the end of 2017 and 2018, we expect more substantial dividends to the weakening of the ruble, investors will return in this paper.
Should be wary of securities with high dividend yields, but it may decline in the future: “Bashneft”, “Tatneft”, “Aeroflot”, “MGTS”. “Bashneft” a lot depends on the position of the new majority shareholder of “Rosneft” does not exclude the change of the dividend policy of the company to decrease. “Tatneft” in recent years, directs the payment of 70% of the net profit against this background, the paper in recent months were actively growing, but no guarantees payout at this level in the future.
A separate line note “Enel Russia”. We expect the company to payout a solid dividend after the closing of the sale of Reftinskaya GRES. After the sale of “Enel Russia” can fall significantly the financial performance, followed by the dividend payment.
Roman Tkachuk,
Senior analyst,