The large European telecommunications companies have maintained their commitment to dividends despite the strong competition that is putting pressure on their results. In fact, they have already designed the shareholder remuneration for next year, in parallel with the efforts to reduce debt and maintain the investment pulse in the deployment of fiber optic networks and 5G mobile telephony.
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 15. The second tranche, which must be endorsed at the next shareholders’ meeting, will take place in June 2023. The company’s dividend yield is close to 8.67%.
Telefónica is going to leave behind the scrip dividend of the last two years, adopted to avoid cash outflows in the midst of the Covid-19 crisis and in view of the 5G spectrum auctions in countries such as the United Kingdom, Spain and Brazil, which have already taken place. Under this formula, it also paid a dividend of 0.30 euros per share last year.
The operator, which has close to 1.2 million shareholders, will disburse around 1,800 million euros in the annual dividend as a whole. In addition, it is going to propose to the shareholders’ meeting the amortization of 0.43% of the capital it has in treasury stock.
Orange, for its part, will propose the payment of 0.70 euros per share charged to 2022, the same amount as in the previous year (in 2020 it paid 0.90 euros after winning a tax dispute). Of these, however, 0.30 euros were paid on an interim basis on December 7. The second tranche will be paid, presumably, in June 2023. The dividend yield of the French teleco is around 7.59%. The total disbursement will be around 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 close to 22.95% of the capital (9.56% through Bpifrance Participations). The company has close to 700,000 individual shareholders.
Deutsche Telekom
In turn, Deutsche Telekom proposed a few days ago, in the presentation of the accounts for the third quarter, the payment of a dividend of 0.70 euros per share charged to 2022, in this case, 10% more than in the previous year. , when he paid 0.64 euros per title. The remuneration, which must be approved by the shareholders’ meeting in April, was part of the improvement in the forecasts 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 dividend,” said CEO Tim Höttges.
The dividend yield of the German operator, whose shares are up 15% this year, is around 3.34%. The total disbursement that Deutsche Telekom will make in the payment of dividends will be close to 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 capital.
In this race, Vodafone has just closed the deadline for shareholders to receive an interim dividend on February 3, 2023 of 4.5 euro cents per share, the same figure as the previous year, and in line with its commitment to reach nine pence in the year as a whole, the same amount as the previous year. The interim dividend will involve a disbursement of close to 1,300 million euros.
However, the change of CEO, following the resignation of Nick Read (replaced on an interim basis by the financial director, Margherita Della Valle), could also lead to a review of the shareholder remuneration strategy.
Currently, the dividend yield of Vodafone, whose shares have fallen 25% since the beginning of the year, is close to 8.97%. In addition, the group allocated in its first fiscal semester, which ended in September, close to 1,004 million euros to share repurchase plans.
Strong dividends from US giants
Verizon. The US telecommunications giants continue to pay multimillion-dollar dividends year after year. Thus, for example, Verizon accumulates 16 consecutive years of increasing this remuneration to shareholders. In 2022, it has approved the payment of four dividends (the last one will be effective at the beginning of February) for a joint amount of 2.585 euros per share, 2% more than in the previous year. Verizon, which tops Morningstar’s dividend list, has a dividend yield of about 6.95%. In the first nine months of the year, the company allocated a total of 8,100 million dollars (about 7,670 million euros) to the payment of dividends.
AT&T. AT&T, for its part, defended in its latest results presentation its commitment to allocate close to 8,000 million dollars a year to dividends. The US operator reduced this remuneration by 46% at the beginning of 2022, in this case after the segregation of the WarnerMedia businesses, for its subsequent merger with Discovery. In fact, last year, the teleco allocated more than 15,000 million to dividends.
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