Large European telecom companies have maintained their commitment to dividend payments despite strong competition pressuring their results. In fact, they have already designed shareholder bonuses for the coming year, in parallel with efforts to reduce debt and keep the pulse on investing in the deployment of 5G fiber optic and mobile networks.
Among them, Telefónica confirmed the payment of 0.30 euros in cash per share, of which 0.15 euros per share will be paid on December 15th. The second tranche, which must be approved at the next meeting of shareholders, will be held in June 2023. The company’s dividend yield is close to 8.67%.
Telefónica will be left behind Dividends Over the past two years, it has been certified to avoid cash outflows in the midst of the Covid-19 crisis and given the auctions of 5G spectrum in countries such as the UK, Spain and Brazil, which have already taken place. Under this formula, I also paid a dividend of €0.30 per share last year.
The operator, which has approximately 1.2 million shareholders, will spend around 1,800 million euros in annual profits as a whole. In addition, it will propose to shareholders to meet the amortization of 0.43% of the share capital held in treasury shares.
Orange, for its part, will propose paying €0.70 per share until 2022, the same amount as in the previous year (in 2020, it paid €0.90 after winning a tax dispute). However, €0.30 was paid on a provisional basis on December 7th. The second installment will be paid, most likely, in June 2023. French Telecom’s dividend yield is around 7.59%. The total expenses will amount to about 1,860 million euros.
In the case of Orange, the first beneficiary of the dividend is the French state itself, given its position as the first shareholder, with approximately 22.95% of the share capital (9.56% through Bpifrance shares). The company has approximately 700,000 individual shareholders.
Deutsche Telekom
In turn, Deutsche Telekom proposed a few days ago, in the presentation of accounts for the third quarter, to pay a dividend of 0.70 euros per share up to 2022, in this case, 10% more than the previous year. When paying 0.64 euros per address. The bonus, which must be approved by a shareholder meeting in April, was part of the improvement in outlook for 2022, announced by Deutsche Telekom. “Our business continues to grow, and it puts us in a position to improve not only our forecasts, but also our bottom line,” said CEO Tim Hotges.
The dividend yield for the German operator, whose shares are up 15% this year, is around 3.34%. The total payments to be made by Deutsche Telekom for the dividend payment will approach 3,500 million euros. Of these, the German state will be the main beneficiary, given its position as the largest shareholder, with 30% of the share capital.
In this race, Vodafone has just closed the deadline for shareholders to receive an interim dividend of 3 February 2023 of 4.5 euro cents per share, the same as the previous year, and in line with its commitment to reach nine pence a year. As a whole, the same amount as in the previous year. The interim dividend will include the payment of approximately €1,300 million.
However, the change of CEO, following the resignation of Nick Reid (he was replaced temporarily by CFO, Margherita Della Valle), could also lead to a review of the shareholder rewards strategy.
At the moment, the dividend yield for Vodafone, whose shares are down 25% since the beginning of the year, is close to 8.97%. In addition, in the first financial quarter, which ended in September, the Group set aside approximately €1,004 million to participate in buyback plans.
Strong earnings from the US giants
Verizon. The giant telecom companies in the United States continue to pay out millions of dollars in dividends year after year. And so, for example, Verizon has accumulated 16 consecutive years of increasing this bonus for shareholders. In 2022, it has agreed to pay four dividends (the last of which will be effective at the beginning of February) with a combined amount of €2.585 per share, up 2% over the previous year. Verizon, which leads Morningstar’s dividend, has a dividend yield of about 6.95%. In the first nine months of the year, the company set aside a total of $8,100 million (about €7,670 million) to pay dividends.
AT&T. For its part, AT&T in its latest results presentation defended its commitment to set aside nearly $8,000 million annually for dividend payments. The US operating company reduced that bonus by 46% at the start of 2022, in this case after spinning off the WarnerMedia business, from its subsequent merger with Discovery. In fact, last year, the telecom company set aside more than 15,000 million for dividends.
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