Spain’s Ibex 35 will increase its dividends despite lower earnings

Spain’s Ibex 35 is more attractive than the rest of the major stock markets, except Italy’s. The reason is the Spanish index’s dividend yield, which stands at 4.4% heading into 2023, the highest return since 2019, even though earnings are not going to grow this year, according to analyst consensus collected by FactSet.

While Ibex earnings are set to fall by just over 7% compared to 2022, the dividend per share is expected to rise by 7.5% to €412, also the highest since 2019. Over the last decade, there has clearly been a progressive improvement in both the yield and the dividend per share itself. However, with the pandemic, companies had to suspend or cut their dividends. Since then, they have decided to recover what is one of their distinguishing features.

84% of foreign companies to maintain or expand their investment in Spain

84% of foreign-owned companies established in Spain plan to increase or maintain their investments in the country, despite the uncertainty of the international economic and political situation, according to the results of the Barometer of the Business Climate in Spain for 2023.

However, despite the positive outlook, foreign companies in Spain consider that action needs to be taken on some aspects of costs, such as electricity and energy, which are some of the main concerns in this edition, or of the labour market, such as the adaptation of labour legislation to the needs of companies.

Foreign investors focus on Spanish hotels

Spain’s hotel sector is under the foreign investor’s radar as they are attracted by international tourism growth and a higher quality offer with world-renowned brands. This year new overseas funds have entered the sector and a third of the total investment has been directed towards five-star hotels. In 2022, international investors showed their confidence in the Spanish hotel market, with transactions worth €2.3 billion in 2022.

Spain is the second most visited country in the world, making its tourism industry one of the most competitive. In 2019, a year before the pandemic, it attracted an all-time record of 84 million tourists. According to industry forecasts, in 2023, once the crisis caused by Covid has been overcome, it will once again reach historic figures. There is even talk of surpassing the 85 million mark thanks to a strong increase in tourist demand in spring and summer.

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