The state company Hidroelectrica (stock symbol H2O), the largest electricity producer in Romania, announced on March 27, 2024 the first dividend proposal since becoming a public company with the listing of shares on the Bucharest Stock Exchange, from the summer of 2023 .

Thus, Hidroelectrica announced that in the General Meeting of Shareholders on April 29 it will propose the distribution of a gross dividend of 13.99 lei per share, which compared to the current trading prices of 128 lei per unit means a dividend yield of 11%, according to ZF calculations. The company had a net profit of 6 billion lei in 2023.

"Approval of the distribution of the net profit of the financial year 2023 in accordance with the provisions of Government Ordinance no. 64/2001, with subsequent amendments and additions, of the total value of the gross dividend in the amount of 6,292,900,952 RON, as well as the value of the gross dividend per share in the amount of 13.99 RON, according to the Memorandum of Understanding presented to the shareholders."

The company's management wants to distribute to investors an amount of 6.2 billion lei, of which the Romanian state will receive approximately 5 billion lei, as the majority shareholder with 80%, the pension funds - which have 10%, about 600 million. lei. The company had a net profit of 6 billion lei in 2023, which means that it fully distributes the profit. In 2023, Hidroelectrica had revenues of 12.5 billion lei and a net profit of 6 billion lei, so a margin of about 50%.

Based on the most recent market capitalization, of 57.6 billion lei, and taking into account the budgeted net profit for this year, of 4.8 billion lei, Hidroelectrica shares are traded on the Bucharest Stock Exchange at a P/E multiple (price earning ratio - n. ed.) 12 times, according to the calculations made by ZF.

For comparison, compared to the net result registered last year, of about 6 billion lei, the shares have a P/E multiple of 9.5 times. On the other hand, the P/S multiple - relative to the company's revenues budgeted for 2024 - is 5.28 times compared to 4.6 times the revenues recorded in 2023.

Since the beginning of 2024, H2O shares have stagnated on transactions of 1 billion lei. By comparison, the main BET index rose by 9.4%