PKN Orlen – dressed in dividends? The share price has already dropped 20% in two weeks

Shortly after the record-breaking results of the concern from Płock were announced, investors from the Warsaw Stock Exchange received another surprise. Conference and presentation of the company's new dividend policy. It assumes PLN 4 of the minimum guaranteed dividend and its increase by PLN 15 until 2030.

The market was happy, the share price rose to over PLN 67 on increased turnover. And here, those who believed in the new policy of PKN were put to a severe test, because the share price has since fallen by 20 percent. One fifth of the company has evaporated from the market, and we are talking about the largest company in the country. All of this took just over two weeks, and by 15:00 p.m. on March 16, the stock price seems to have continued to drop steadily, as if someone had taken the bottom.

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Can investors feel dressed in Orlen's dividend?

Certainly, it is impossible not to notice that we are dealing with a theater play between a good and a bad "cop". The president of Orlen is good, and the head of MAP is bad. One says how good it is in the company and wants the best for investors, and the other that he is still working on the tax, which, by the way, is enforced by Brussels, and the dividend should be as low as possible - the message is inconsistent.

Along the way, the stock market was hit by the banking crisis, but also by the collapse of the oil market, where WTI barrel price dropped to the lowest level since December 2021. The combination of all these events (banks and oil are independent events) and dependent events, such as communication between the company's president and the minister, is killing Orlen's share price. While nobody has any influence on what happens to oil or banks, communication with the market from the owner and CEO could be more thoughtful, because not only institutional investors, but also individual investors and PPK participants suffer from this. Not to mention that such a way of communication and uncertainty deters foreign investors.

Therefore, it is not surprising that the company is listed with an index forward P/E 3,5, which is definitely below the European average for energy companies.