Iberdrola's capitalisation nears 70 billion euros and consolidates its position as Europe's largest electricity company

Iberdrola closed the year with a market capitalisation of around 70,000 million euros after climbing 6% on the stock market, making it the largest utility in Europe and the fourth largest in the world.

The electricity company, which for yet another year has created value for its 600,000 shareholders, has been favoured by the market after announcing on 9 November an investment of 47,000 million euros until 2025 and a growing dividend, with the aim of reaching between 0.55 and 0.58 euros per share during the year.

Net profit, which will reach the estimated range of 4,000 to 4,200 million euros this year, will be between 5,000 and 5,200 million euros in 2025, according to the company.

Iberdrola's shares have risen by 6% on the stock market this year - which represents a return of almost 11% including the remuneration paid of 0.449 euros per share - and has signed the year as the best-performing electricity company on the Ibex 35 and the twelfth most advanced share on the selective index. 

The presentation of the strategic plan has been one of the driving forces of the company chaired by Ignacio Sánchez Galán on the stock market, as highlighted by financial analysts, as it has accumulated a revaluation since then of more than 10%.

Analysts have applauded the plans presented by the company at its Capital Markets & ESG Day. UBS, Mediobanca, Banco Santander, Goldman Sachs, Barclays, Morgan Stanley, Deutsche Bank, CaixaBank and Renta 4, among other analysts, have revised their forecasts and most of them have raised the average target price, which now stands at around 12 euros per share, according to data from the consultancy FactSet. Some 53% of analysts recommend buying, 47% recommend holding and none are in favour of selling Iberdrola shares.

The market has valued Iberdrola's resilience, potential and diversification of businesses (renewables, customers and networks) and geographies (with a strong presence in Spain, the United Kingdom, the United States and Brazil). The stock has thus avoided the stock market penalisation suffered by other competitors. Also, its investment plans, adapted to the current situation, allocate more money to the network business -27,000 million-, with assured returns.

Solvency is another key to the value, according to analysts. With assets of more than 170,000 million euros, Iberdrola maintains a "solid" profile that underpins its current ratings. In its financing strategy, the company aims to continue working with its traditional counterparties (the European Investment Bank and the ICO) and to add new lenders, such as the International Finance Corporation (IFC) and the Danish credit agency, among others.

Moreover, its access to the ESG debt market gives it an advantage, with interest rate cuts of between eight and ten basis points on green bonds, an area in which it is the world's leading company with some 16 billion outstanding. A recent example was the placement of this type of debt a few days after presenting its plan until 2025 for 1.5 billion euros, with demand for 5 billion and an initial target of 1 billion, reducing the starting interest rate. 

The share set its annual high, excluding dividends, on 25 May at 11.415 euros per share, after its all-time high of 12.505 euros on 8 January 2021.

Iberdrola rewards its shareholders with a share redemption equivalent to the capital increase charged to reserves in response to its flexible remuneration programme - which allows shareholders to collect the dividend, receive free shares or sell subscription rights on the market - thus preventing shareholders from being diluted, even if they choose to receive the cash.

The dividends it has paid in 2022 represent a yield of 4% and will exceed 5% in 2025, according to its roadmap to 2025.