RBC Investments analysts have compiled a rating of the best Russian securities in terms of dividend payments. Shares of PJSC Magnitogorsk Iron and Steel Works (MMK) are included among the top 10 most attractive shares for investors.
The compilers of the rating explained that when forming the top 10 Russian shares, they considered the dividend yield for the investor, the dividend growth dynamics, as well as the stock quote dynamics as important indicators. As a result, MMK’s shares, which have consistently demonstrated high dynamics in terms of the dividend payments and stock quotes over the past five years, entered the top 10. Weighted average return on MMK shares amounted to 9.96, and the dividend growth rate was 1.43. This is one of the best indicators among Russian companies.
Payment of high dividends to company’s shareholders is one of MMK's financial policy priorities. Maria Nikulina, Head of MMK's Financial Resources Department, commented on MMK's inclusion in the rating, “Our strategic initiatives are aimed at creating more value and reliable dividend payouts for all our shareholders. Our dividend policy stipulates payout of not less than 100% of free cash flow, subject to Net debt/EBITDA less than 1.0x. The Group consistently generates sufficient cash flow and reiterates its commitment to the approved dividend policy.” According to Q4 and FY2020 results, the Company recommended the payment of dividends in the amount of RUB 0.945 per share, which corresponds to 114% of free cash flow.
The RBC Investments rating is not the first time that experts have highly evaluated MMK's shares. In 2020, MMK ranked third among global steel companies in terms of total shareholder return (TSR) in the Value Creators 2020 rating published by the international consulting company Boston Consulting Group (BCG). MMK's TSR was 40% – the highest indicator among Russian steel companies, third place among all Russian companies and third place among all global steel companies.