The mass media companies of national communication, Atresmedia and Mediaset, are the ones that are currently paying the most generous dividend on Spanish equities »]. With an annual profitability that is very close to the 10% levels and that they are at the top of the Spanish listed. Above sectors that are known for their high remuneration, such as electricity or energy companies that range between 5% and 7%. In this way, through investments in Atresmedia and Mediaset, a fixed and guaranteed income can be obtained every year, which is very interesting.
In particular, if it is compared with the interest rate that is generated from banking products for savings or derivatives of fixed income that barely exceed 1%. As a consequence of cheaper price of money by the European Central Bank (ECB). And that has led to the money supply being at 0% at this time. In other words, at historical lows for several years in a community strategy to boost economic growth in the euro zone.
Well, these are two values that can be very interesting to hire from now on due to the profitability of their dividends. Beyond other considerations of a technical nature and also from the point of view of its fundamentals. Although its evolution in the equity markets in recent months has not been very satisfactory for the interests of small and medium investors. Due to the depreciation of their prices and that they have placed them at very low levels of contribution. Below the estimates of some analysts and financial broker.
Atresmedia and Mediaset: business
One of the problems faced by these two companies that are listed on the Spanish continuous market is the doubts that their business lines present. In particular, with the appearance of some pay TV channels and the most innovative proposals that other audiovisual communication media are launching. In this general context, these securities are being penalized by investment agents. Although there is also some other indication that they could have formed a floor in the formation of their prices.
While on the other hand, it should be noted that these two values of Spanish equities are very cyclical. This actually means that they develop a better performance than the rest in the bullish scenarios of the bags. While on the contrary, in recessive periods they tend to do worse than in other sectors. From this point of view, they can be considered as more volatile values as they present greater differences between their maximum and minimum prices. Therefore, very beneficial for trading operations.
Rebound in its valuation
After having dropped these values to unknown levels in recent years, there has been a rebound in the configuration of their prices. Although it may be a bearish trap in which small and medium investors can fall. Because at the end of the day everything will depend on what direction the national equity markets take. It will be the key to knowing if the right moment to enter your positions or, on the contrary, stay out of any investment operation.
On the other hand, it cannot be forgotten that they are companies linked to advertising business and this is undoubtedly very changeable. To the point that it would be one of the biggest losers in the face of an upcoming economic recession. What would influence a decline in the price in these two media that are listed on the stock market. Therefore, prudence must be the common denominator by which your actions in the equity markets are governed. Because in principle its potential for revaluation is really very high, but also its level of corrections. Above that shown in other stock markets.
The key is advertising
A good part of the income of Atresmedia and Mediaset come from advertising. In this sense, some reports have recently been published indicating that these revenues will decline significantly from next year. This would be reason more than enough to forget about these two proposals on the stock market for a long time. Because it can give us more than one negative surprise from now on. Beyond other kinds of considerations in investment strategy.
It must also be appreciated that any change in the concession of channels on Spanish television can have a very relevant direct impact. To the point that it can make their actions fall or appreciate in the national squares. In a sector characterized by being very changeable and that depends largely on the economic growth of the country. Where the acquisition of television rights can significantly vary prices, both at Atresmedia and Mediaset. This aspect cannot be forgotten if you want to include them in your next investment portfolio.
Atresmedia at levels of 4 euros
This means of communication has its support at 4 euros per share. If it is exceeded, it will be necessary to undo positions with special speed since the falls could be very intense from that precise moment. From this point of view there will be no choice but to carefully monitor your prices to develop the most correct investment strategy. Whereas if, on the contrary, he managed to overcome the barrier that has at 5 euros it will be able to constitute an excellent entry level to make profitable the savings with certain security. Something that for the moment has not been achieved, although we will still have to wait for a few more trading sessions.
While on the contrary, its competitor Mediaset trades in a broader range that goes from 7 to 9 euros per share. It would have to choose to exceed these levels in its price so that its trend is clearly defined. That is, bullish or bearish depending on the movements taken. Despite the interest that may be on the part of small and medium investors to take positions due to the attractiveness of its high dividends. And from which you can configure a fixed income portfolio within the variable. With a remuneration that can be obtained in few financial products.
A sector with few recommendations
In any case, it is not one of the segments preferred by financial analysts who see few business opportunities with the opening of positions. If not, on the contrary, they warn of the risks in these operations and that they are generally more in favor of selling than buying. Despite the serious rises in their prices that may develop from now on. That they would serve above all to abandon the positions in these two values to protect money intended for investment. At least in short-term investment strategies that require greater skill from retail investors.
At the moment, their greatest attraction lies in the fact of the high dividend they distribute among their shareholders. But with the obvious risk of losing it in the quotation of its prices. Especially if they demolish supports of a certain relevance, such as those mentioned above. Among other reasons, because the selling pressure it would be very strong in the financial markets. With the real possibility that annual minimums could be reached in its valuation on the stock market. Something that could perfectly happen in the last stretch of this current year.
Results of both companies
Atresmedia has obtained excellent results in the first quarter of the year, its best data in this period for 11 years. The company's net profit grew by + 36,6% to 28,7 million euros, the highest in a first quarter since 2008. Ebitda also increased to 45,1 million euros, which represents growth of + 35,8% compared to 2018 and becomes the highest in a first quarter since 2008, with a margin over net income of 17,5%, the highest in the first three months of the year since 2008.
While for its part, its competitor Mediaset Spain has closed 2017 with its highest economic data since 2008. The commercial potential of the company, a leader in advertising investment since 2004, and the management of its resources, have led it to increase its profit net 15,5% compared to 2016 to reach 197,5 million euros. The gross advertising revenue of its own media has grown between January and December 2017 by 1,6% to 946,4 million euros, despite not having had the broadcasting rights of any major sporting event in 2017, as did It happened in 2016 with the Soccer Eurocup. Including third-party advertising marketing (€ 23,3 million) and commissions, net advertising revenue was € 928,7 million. Among other reasons, because the selling pressure it would be very strong in the financial markets. With the real possibility that annual minimums could be reached in its valuation on the stock market.