FCC: DIVIDEND MAINTAINED (ANÃLISIS BANCO SABADELL)
In its AGM announcement, the company has just announced a proposal to pay a single scrip dividend of € 0.40/sh. (+0%; 4.7% yield). This proposal will be submitted for approval in the upcoming AGM (2nd call on 03/06/20), and the Board of Directors will be charged with setting the payment date and other conditions.Positive news, as we did not rule out a cut or even cancellation. Despite the fact that FCC has debt under control (~3.6x NFD/EBITDA in 1Q’20) and more than € 1.5 Bn of available liquidity (~40% NFD), it was still unclear if the company would decide to take a more cautious approach. The fact it has maintained the dividend sends a positive message on the impact from Covid-19 on the business. With the revision of estimates we plan to make, in a scenario of V-shaped recovery (-13% on EBITDA’20e) we would cut our T.P. at least -7%, leaving it at around € 13/sh. (+54% upside), and in a negative scenario of U-shaped recovery (-20% in EBITDA’20e and -14% on average in 2020-21) we would reach a T.P. of € 12.10/sh. (+43% upside), and thus we maintain our BUY recommendation.
Fomento de Construcciones y Contratas is the parent company of a group engaged in sanitation services, cleaning, maintaining, purification and distribution of water, construction of highways, hydraulic works, marine works, air and rail transport infrastructure, urban developments, housing, non-residential buildings, office buildings, toll highways, parking garages, marinas and water treatment plants. Co. is also engaged in the manufacture and sale of cement and cement infrastructures, such as precast concrete elements; and in the financial markets, and real estate development, leasing and tourism.
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