Keeping money up to 1.4 million in bank deposits is the safest financial decision, however, few investors can be inspired by such a decision. The Central Bank's key rate continues a slow but steady decline, and with it the attractiveness of most banking products falls. But do not completely turn away from such a financial institution as a bank. You can become its shareholder. The profitability of Sberbank shares shows amazing stability against the backdrop of all economic and political events. Sberbank has been and remains one of the blue chips in the stock market of Russian campaigns. Most investors have Sberbank shares in their portfolio.
What is the profit?
Ownership of the package and the return on shares of Sberbank suggests two ways to make a profit. This is the profit from the difference in the purchase price and the sale price, as well as dividends paid. If you are counting on profits from dividends, you must be the owner of the stock at the time the registry is closed for dividends. In the stock market, this date is called a dividend cutoff. It must be borne in mind that when making a stock purchase transaction, you become the owner not immediately, but the next day or even every other day.
Dividend cutoff is another feature of the securities market, in particular stocks. As soon as the amount allocated for the payment of dividends becomes known exactly, the shares instantly fall in price. The fall directly depends on the size of the established payments. This is called a dividend gap. Investors trading in the stock market are well aware of this feature, and therefore have information on the so-called dividend calendar.
Normal or privileged
Those who are already interested in the possibility of buying Sberbank securities know that the bank issues both ordinary and preferred shares. At first glance, the yield on Sberbank shares for individuals is the same, regardless of the type of paper. But here the cost of one preferred share is significantly different from the cost of an ordinary one. What is its advantage? Dividend payments on ordinary shares are not known in advance and are set depending on the campaign’s profit for the past period. Based on previous values, you can predict how much dividend income will be from owning an ordinary share. With preferred shares, the story is different. We are talking about a fixed pre-known income from the payment of dividends, regardless of the success of the business of the enterprise.
Profitability of Sberbank shares
The dividend policy of the largest bank in Russia is one of the most stable. Shareholders regularly receive payouts. More importantly, with the increase in the value of the stock, the percentage of dividends paid is also growing.
However, the main income is provided, of course, not by payments, but by the opportunity to speculate with the investor’s portfolio of securities. Despite the fact that Sberbank is showing steady growth, the share price of the largest bank is still fluctuating, sometimes quite significantly. Experienced speculators are able to profit from this even more than 100%. In fairness, it is worth saying that such results are available only to experts when taking into account the constant immersion in the stock market. What is the return on Sberbank shares for their ordinary holders? Let's try to figure out specific examples.
What provides profitability growth?
An ordinary investor should not count on a huge profit from long-term ownership of shares. If we take into account only the profit from dividends, on average over the year, the yield on Sberbank shares ranges from 4-5% for ordinary shares and about 6% for preferred shares. Performance is not the highest. Lower than deposit rates at many banks.
But the investor always reserves the right to win on the timely sale of a package of securities. The main thing is to choose the most suitable moment, both for purchase and for sale. However, the majority of Sberbank shareholders, as statistics show, are conservative investors and earn on the steady increase in the bank's share price.
Analysis for the year
According to the results of last 2017, Sberbank PJSC exceeded the projected profit by 20%. Dividend payments, in this regard, increased. And probably will continue to grow. In any case, the payout rate remains at 36%.
Of course, this year was full of events, both economic and political. But in all these twists and turns, Sberbank remained stable, and sometimes showed tremendous growth. So, in late February, the price of one paper soared to a record 280 rubles. A good growth was shown by the value of shares in May and in early July - around 230 rubles. But overall, over the past year, the price and profitability of Sberbank shares remained at the same stable level. The price of the stock last October and now fluctuates around 190 rubles.
Analysis for 10 years
More interesting is the analysis of the profitability of Sberbank shares over 10 years. In general, unlike the western market, the Russian securities market is not accepted to be analyzed in such a perspective. The economy is too young and unstable. And if we say in the States, securities purchased for 10-30 years are considered as long-term investments, then we have a maximum of 3 years. But Sberbank of Russia PJSC is good at that, because it is one of the most stable representatives of Russian blue chips and a favorite in the banking sector.
So, what was the return on Sberbank shares over the past years? As for the price of securities, the most difficult, as for many other financial institutions, was 2014. The price fell almost to 50 rubles. But Sberbank is always quickly returning to positions, for which speculative investors love it. From the end of 2014, the price begins to confidently creep up. Over the year, the price of an asset doubled, which is a very good and rather rare indicator for the stock market. More interestingly, such a systematic and active growth according to all laws should be followed by a decline in prices or its fluctuations at approximately the same level, but the stock continued to grow, and by March 2016 had reached a value of 112 rubles. This corresponds to an annual income of as much as 140.16%.
As for the dividend income on Sberbank shares, over 10 years it has grown by almost 12 times. Very revealing figures and a very impressive analysis. It should be said that such confident indicators are very rare not only for the Russian, but even for the international stock market.
The risks
The stock market is extremely dynamic. In the context of one trading day, the price of any paper can significantly change both in the direction of increase or decrease. Sberbank shares are by no means an exception. At first, experienced investors recommend conservative trading without active speculation. Moreover, the securities of Sberbank of Russia PJSC are the best suited for these purposes, and will provide a decent income in almost any scenario.