Offering dividend returns to investors of 7-8 percent in 2017, well above the European average of 2-3 percent, Romania is ranked first in a worldwide survey by Tradeville.
The survey estimates that in 2018 private equity companies will maintain the same profit distribution rate. For companies where the Romanian state has a majority stake, the analysis followed two scenarios: with a 50 percent distribution rate, investors would earn 7.67 percent, while a 90 percent distribution rate would yield a return of 8.83 percent.
Globally, there is a growing trend in dividend value, reaching a record high of USD 497.4 billion in the second quarter of 2018, up by approximately 13 percent year-on-year. New record dividend values were recorded in 12 countries, including France, Japan and the United States. Also in the second quarter, the dividend distribution rate globally increased by 9.5 percent year-on-year.
In 2017, the dividend yield at Bucharest Stock Exchange’s main index, the BET index, was approximately 7.6 percent.
In addition to the tax benefits it offers, dividends can be a support point for investors in volatile times. Lately, the average dividend yield was significantly higher than the yields of traditional fixed-income financial instruments (bank deposits and government securities), which have a higher market risk than the latter, the report shows.