Iberdrola to invest 58 billion euros through 2028, focus on networks

Iberdrola SA unveiled plans to invest 58 billion euros through 2028, with 37 billion euros targeting networks, and an additional 45 billion euros between 2029-2031. The utility forecasts adjusted net profit of 7.6 billion euros and EBITDA of 18 billion euros by 2028, alongside distributing nearly 20 billion euros in dividends from 2025 to 2028. Iberdrola reaffirmed its shareholder remuneration policy, maintaining a 65-75% payout ratio and a dividend per share floor of 0.64 euros, while projecting mid-to-high single-digit earnings growth through 2031.

Analysis

Iberdrola SA has presented a robust long-term strategic plan centered on significant capital investment and shareholder returns. The company plans to invest €58 billion through 2028, with a substantial €37 billion allocated to networks, followed by an additional €45 billion between 2029 and 2031. This long-range investment provides high visibility into the company's growth trajectory, which is further supported by ambitious financial targets, including a projected €7.6 billion in adjusted net profit and €18 billion in EBITDA by 2028. Management's confidence is underscored by the observation that 2025 results are already tracking ahead of the 2026 outlook, with a forecast for sustained mid-to-high single-digit earnings growth through 2031. For income-focused investors, the reaffirmation of its shareholder remuneration policy is a key positive, maintaining a 65% to 75% payout ratio and establishing a firm dividend per share floor of €0.64. This commitment, alongside a plan to distribute nearly €20 billion in dividends by 2028, solidifies the utility's profile as a stable and predictable income generator.

Key Decisions for Investors

• Income-focused investors should view the reaffirmed 65-75% payout ratio and the establishment of a €0.64 dividend per share floor as a strong signal of commitment to shareholder returns, providing a clear basis for yield calculations.
• Long-term investors should assess the value of the sustained mid-to-high single-digit earnings growth forecast through 2031, which is underpinned by a defined, multi-year €103 billion investment plan primarily targeting core network infrastructure.
• Investors should monitor the execution of the capital deployment plan and the company's ability to continue exceeding its own financial forecasts, as this outperformance is a key component of the current positive outlook.