May 18th is one of the most important days of the year for the Italian Stock Exchange: Dividend Day takes place in Piazza Affari, the moment in which many listed companies distribute part of their profits to shareholders through the detachment of coupons.
On the Ftse Mib index alone, there are 22 blue chips involved, while overall the number of companies involved exceeds 70 considering also mid caps, small caps and Euronext Growth Milan companies.
Because the Ftse Mib can go down
To lay people, the most immediate effect could be surprising: those who observe the stock market will see the Milanese stock market falling even in the presence of regular trading and without particular tensions. Or, better yet: without particular additional tensions, compared to the very serious crisis in the Strait of Hormuz.
In fact, the detachment of the dividend involves an automatic and practically physiological adjustment of the share price. The reason: when a company distributes a coupon, the value of the security is adjusted at the opening of trading by subtracting the amount paid to shareholders. If many large-cap companies trade on the same day, the index may also feel the effect.
For the Ftse Mib the estimated technical impact exceeds 1.5%, a change that could make the list appear in the red without reflecting a real deterioration in investor sentiment. A mathematical decline, therefore, and not one of value.
Companies paying dividends today
Among the most anticipated groups are banks, insurance companies, utilities, energy and industrial companies.
In the financial sector the following stand out:
- Intesa Sanpaolo with a final dividend of 0.19 euros per share;
- Banca Monte dei Paschi di Siena with 0.86 euros;
- Bper Banca with 0.56 euros;
- FinecoBank with 0.79 euros.
Between energy and utilities the following are involved:
- Eni with a tranche of 0.27 euros;
- A2A with 0.104 euros;
- Italgas with 0.432 euros;
- Inwit with 0.5543 euros;
- Saipem with 0.17 euros.
Also present were luxury and industrial names such as Brunello Cucinelli, Moncler, Recordati and DiaSorin.
The actual payment of coupons is scheduled for May 20th.
Piazza Affari European dividend market
In recent years, the Italian Piazza Affari has carved out a leading role among the European stock exchanges thanks to average returns higher than other large lists. Returns supported above all by banks, utilities, insurance and energy.
One of the explanations, but not the only one, is that the Italian index is dominated by sectors that historically distribute a significant share of profits: banks (such as Intesa Sanpaolo), insurance (such as Assicurazioni Generali), utilities (such as A2A) and energy (such as Eni). These are sectors that mostly often generate predictable cash and therefore have less need to reinvest everything in growth.
Other markets, such as the German Dax but especially the American indices, have a stronger presence of technology, semiconductor, software and high-growth company stocks. Companies of this type often prefer to reinvest profits to boost growth and competitiveness.
But among the various reasons there is also another which concerns the culture of Italian investors, traditionally oriented towards periodic returns: for this reason, government bonds and, as mentioned, high dividend stocks are very popular in Italy.
