Ferrovial's Second Interim Scrip Dividend of €342M: A Strategic Move in the High-Yield Infrastructure Sector

In October 2025, Ferrovial SE (FER) announced a second interim scrip dividend of €342 million for 2025, offering shareholders a choice between cash or additional shares, Morningstar reported. This move underscores the company's commitment to balancing shareholder returns with capital preservation-a critical strategy in the high-yield infrastructure sector, where cash flow stability and reinvestment opportunities are paramount. By analyzing Ferrovial's dividend structure, historical policies, and sector benchmarks, we can assess how this payout aligns with broader industry trends and investor expectations.

Strategic Flexibility in Dividend Distribution

Ferrovial's €342M dividend introduces flexibility for shareholders, allowing them to elect cash or shares between October 28 and November 11, 2025, with a default to shares if no choice is made, the announcement said. The number of new shares issued will be calculated using the volume-weighted average price (VWAP) of Ferrovial shares on November 7–11, ensuring alignment with market conditions, the announcement noted. This approach mirrors the company's 2024 scrip dividend strategy, where similar election periods were offered, as detailed in Appendix I – Scrip dividend.

The tax implications further enhance this flexibility: cash dividends face a 15% Dutch withholding tax, while share dividends are taxed only on their nominal value, according to the announcement. For investors seeking tax efficiency, the scrip option may be preferable, particularly in jurisdictions where capital gains are more favorably treated. This structure reflects Ferrovial's awareness of global investor preferences and its effort to optimize returns in a competitive sector.

Ferrovial's Financial Strategy: Conservative Yet Purposeful

Historically, Ferrovial has maintained a payout ratio of 17.92% and an average dividend yield of 2.37% over the past five years, as reported in Appendix I. The 2025 interim dividend of €0.3182 per share corresponds to a yield of 0.69%, as stated in the PR Newswire release, significantly lower than the sector's average yields. For context, high-yield infrastructure stocks such as Brookfield Infrastructure (BIPC) and Black Hills (BKH) offer yields of 4.0% and 4.5%, respectively, according to the SureDividend list.

This conservative payout ratio contrasts sharply with the sector's median payout ratios. For instance, the power utilities subsector has a median payout ratio of 55.46%, while oil and gas distribution firms average 60.73%, according to Dividend Fundamentals by Sector. Ferrovial's low payout ratio suggests a deliberate focus on capital preservation, enabling reinvestment in infrastructure projects-a hallmark of the sector's long-term value creation.

Sector Context: High-Yield Infrastructure's Dividend Dynamics

The high-yield infrastructure sector is characterized by stable cash flows and varying payout strategies. As of January 2025, the sector's average dividend yield was approximately 2.58%, according to the same Dividend Fundamentals by Sector data, with subsectors like renewable energy infrastructure achieving yields as high as 10%, according to an AIC press release. However, these higher yields often come with elevated payout ratios, such as the Canadian energy infrastructure firm with a 136.55% payout ratio based on earnings, noted on the SureDividend list.

Ferrovial's approach diverges from such high-risk, high-reward models. Instead, it prioritizes financial flexibility, a strategy that aligns with its broader corporate actions, including share buybacks and cancellations outlined in Appendix I. This balance between returning capital and retaining liquidity is critical in infrastructure, where long-term projects require sustained investment.

Conclusion: A Prudent Path in a Competitive Sector

Ferrovial's second interim scrip dividend of €342M reflects a measured approach to shareholder returns. While its yield and payout ratio lag behind some high-yield peers, this conservatism is strategic. By offering flexible payment options and maintaining a low payout ratio, Ferrovial ensures it can navigate economic uncertainties and fund growth opportunities in its infrastructure portfolio.

For investors, this dividend underscores Ferrovial's commitment to long-term value creation rather than short-term yield maximization. In a sector where reinvestment is key, Ferrovial's strategy positions it to capitalize on infrastructure's enduring role in global economic resilience.