Gain useful insights and manage risk during this period of market turmoil with Risk Bureau from IHS Markit. Registe… https://t.co/wjq4hQa2YO
Attractive dividends from the two French carmakers
PSA and Renault posted strong 1H18 results and confirmed their 2018 outlook unlike some other European carmakers
- We expect PSA to boost its FY18 dividend by 50%
- Renault forecast dividend yield is at a five-year high
- We project dividends from French carmakers to grow CAGR 12% over next four years vs. 8% for France CAC 40 and 6% for the three German carmakers.
European automobiles stocks have been under pressure over recent months against the backdrop of escalating international trade tensions. While the Stoxx Europe 600 is down 2% Year-To-Date (YTD), its automobiles sector sub-index is dropping 13% YTD. In France, Renault's share price is down 12% YTD, but PSA is up 32%, after a sharp price increase following 1H18 results release.
Despite challenges such as the global trade conflicts, the new emissions regulation known as WLTP, the currency volatility in emerging markets and the pulling-out of the Iranian market due to US sanctions, PSA and Renault confirmed their 2018 outlook at 1H18 amid strong results, while some other European carmakers revised their outlook downwards.
EBIT margin trend: PSA vs. Renault
Post 1H18 results, we have revised our FY18 dividend estimates upwards for PSA. We now expect a dividend of €0.80 per share for FY18 vs. a previous forecast of €0.70 per share. It reflects a dividend increase of 50% and a payout ratio around 25% of earnings per share estimates in line with PSA's dividend policy resumed in FY16. PSA is forecast to deliver the biggest dividend growth among France SBF120 for FY18 but also compared to other European carmakers.
Dividends from French carmakers to grow CAGR 12% over next four years
While we expect a dividend of €3.80 per share, up 7% for Renault, our forecast dividend yield of 5.1% stands at a five-year high compared to 3.5% for PSA. Only Daimler currently trades at a higher dividend yield than Renault (6.7%).
To access the report, please contact firstname.lastname@example.org.
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
Follow Financial Services
- IHS Markit and Hazeltree to Combine Datasets and Treasury Solutions, Delivering Alpha-Generating Investment Management
- June 2020 Model Performance Report
- Dodd-Frank rules eight years later: CFTC/NFA audits
- Daily Global Market Summary - 6 July 2020
- Momentum in Asia fights off a second wave of value in Europe and the US
- Securities Finance: H1 2020 Snapshot
- Daily Global Market Summary - 2 July 2020
- Securities Finance: June 2020
Gain the inside track on the latest trends in the ETF industry as TrackInsight releases its 2020 survey findings fr… https://t.co/xRt6Sio1rc
As rules and regulations around Fair Market Value evolve globally, join us as we discuss how these changes affect… https://t.co/mbb1pDnLBC