International Consolidated Airlines (IAG)

[Andy46]

Hi,

Any thoughts on IAG? P/E around 5, balance sheet looks good, dividend this year of around 7% if we include the special.

Possible downside is i'm unsure about its pension deficit, brexit uncertainty.

Regards
Andy

[Dod101]

I would never invest in an airline; feast or famine. Unilever any day. Airlines with their huge fixed costs can hardly ever be a good investment and at the moment there is significant over capacity on the passenger side anyway.

Dod

[monabri]

It doesn't have a pension deficit according to JLT, it's in surplus - here's a link to the download page for the report.

https://www.jltemployeebenefits.com/en- ... isclosures

THE FTSE 100 AND THEIR PENSION DISCLOSURES January 2019

Report is also useful as it gives annual dividends paid and pension contributions.

[monabri]

I should disclose a small holding in IAG. The dividend is well covered ( x4) and IAG is the national carrier for Spain and UK. One would expect margins to come under pressure ( oil price) and we've seen smaller airlines go out of business ( 2 this year). IAGs margins are better than one might expect at 20% ROCE..(Unilever a stonking 32%, SSE 4% (!..), NG 6%, ADM 16%...for comparison).

[supremetwo]

Hi,
Any thoughts on IAG? P/E around 5, balance sheet looks good, dividend this year of around 7% if we include the special.
Possible downside is i'm unsure about its pension deficit, brexit uncertainty.
Regards Andy

Dividend is in Euros and Spanish tax withhold at 19%.

http://www.iairgroup.com/phoenix.zhtml? ... h-tax-info

You can get the 9% back via the Spanish tax system but no idea how much you might lose in fees:-

Appointing a Spanish tax representative
A Qualifying shareholder will generally need to appoint a tax representative in Spain to submit the Form 210 on their behalf.
A fee will normally be payable for this and any associated services.
------------------------------------------
The following must be attached:
• a certificate obtained from HMRC stating that, at the time when the dividend was declared or paid, the relevant Qualifying Shareholder was tax resident in the United Kingdom for the purposes of the UK-Spain Treaty; and
• evidence of the Spanish withholding tax.

A Qualifying shareholder may need to contact the custodian their shares are held through to ask what documentation they could be provided with in order to evidence that tax has been effectively withheld e.g. a tax voucher.
Please be aware that it cannot be guaranteed that such evidence will be accepted by the Spanish tax authorities.