Acciona has been one of the best-performing stocks in the Ibex 35, the benchmark index of Spanish equities, in recent months. This publicly traded company operates in the renewable energy sector , one of the sectors with the strongest growth prospects and a popular target for small and medium-sized investors. Its high trading volume, compared to other major Spanish equities, has propelled it to new yearly highs.
Furthermore, it should be noted that this stock exhibits a truly impeccable technical profile. It is developing a very clear upward trend, one of the few present among companies listed on the Ibex 35. It has regularly surpassed its highs despite the expected price corrections to adjust to the laws of supply and demand. But most interestingly, a significant number of financial analysts believe it still has considerable upside potential, around 20% above its current price, and this is in addition to other technical considerations.
Acciona, on the other hand, is showing improving business results quarter after quarter, which is encouraging small and medium-sized investors to buy its shares. In any case, it is one of the best-performing stocks on the Spanish equity market over the last twelve months, with its share price appreciating by nearly 30% . From this perspective, it may be overvalued, and with the current market downturn, it may be a poor investment for those looking to take positions in this emerging stock. It belongs to one of the most fashionable sectors at the moment.
Acciona: behavior
One of the aspects to consider regarding this unique stock is its increased volatility in recent months. This is a consequence of the decline in major equity market indices across Europe. This volatility has halted its upward momentum of the past few months and has also served to adjust the positions of buyers and sellers. It's important to remember that Acciona has been one of the top performers on the Spanish stock exchange, with daily gains of around 2% or 3%, which have encouraged many investors to take positions.
On the other hand, Acciona has performed better than other energy sector stocks, acting as a safe haven during periods of high volatility in equity markets—one of its most significant commonalities. But now the million-dollar question is whether this trend will continue, given that the Spanish stock market appears to have shifted direction. At least, its gains are not as steep as in previous months, and its expansion has moderated. From this perspective, it may already be a bit late to invest in it, as the risk of further declines is considerably higher.
Dividend distribution
Acciona offers a guaranteed, fixed dividend every year as an incentive for new shareholders. This dividend currently offers a 5,5% return on investment , paid in two annual installments from investors' accounts. While not an exceptional dividend, it has been steadily increasing year after year to reach its current levels. This growth is driven by a business strategy that is generating significant interest among various financial and stock market players.
It's also important to note that this stock is undoubtedly in an upward trend, and as long as it holds at support levels, this upward trend could continue for months or even years. On the other hand, it's crucial to remember that this company's stock price is driven more by future expectations than by actual results. Therefore, trading its shares may carry more risk from this point forward. Keep this in mind if you want to avoid unpleasant surprises in the coming years, which is a possibility given the current market conditions.
This is the biggest problem when taking positions with a medium- and long-term objective. Beyond other technical considerations that will be explained in another article. On the other hand, it may seem unbelievable at this point in the year, but it is one of the best-performing stocks on the Ibex 35 this year. Perhaps this is to make it more competitive in the future, which could be another of our objectives, through a business line that is generating great expectations among various financial and stock market players.
Latest business results
In its financial results, Acciona reported a total profit of €73 million (+19,2%) for the first quarter of 2019. This increase reflects revenue growth, reaching €1.708 million (+1,7%), driven by strong performance in the energy (+5%) and infrastructure (+4,2%) businesses, as well as sound financial management. However, EBITDA fell to €292 million (-8,8%), primarily due to the company's restructuring.
Acciona completed a divestment process last year, some of whose assets (the thermosolar plants in Spain, Trasmediterránea, Rodovia do Aço in Brazil) still contributed in the first quarter of 2018. In addition, the accounts already include the early termination of the operation by ATLL. On the other hand, the group's turnover grew to 1.708 million euros (+ 1,7%). Energy increased its revenues to 545 million euros (+ 5%) as a result of higher generation prices and an increase in international production due to the entry into operation of new plants. Infrastructure sales grew to 1.108 million euros (+ 4,2%), mainly driven by construction and services.