CFA equity research: CTT Correios de Portugal, S.A - evaluating dividend strategy and impact

Abstract

CTT – Correios de Portugal, with over 500 years of history, operates in Mail, Parcels, Financial Services, and Banking. On October 31st, 2024, its stock traded at €4.28. A sum-of-parts valuation estimates a price of €4.93, reflecting 15% upside, driven by E&P and Banking growth. This thesis also evaluates CTT’s dividend policy, assessing sustainability and shareholder impact. Using historical trends, equity-free cash flow estimation, and the dividend discount model, a sustainable 2024–2029 policy is proposed. The findings balance shareholder rewards with financial flexibility and long-term growth.