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Vodafone’s dividend is its thorn and its jewel

25/01/2019 · Vodafone (VOD) 

Dividends FTSE 100

Vodafone headquarters with brand on the side

Investors buy and sell Vodafone based on the health of its dividend. With a yield of more than 9%, surely there are nice returns to be made even if the pay-out is trimmed?

Telecommunications is a service which many of us would struggle to live without. A utility which is used by roughly 63% of the world’s population. Vodafone (LON: VOD) connects almost 500m of those mobile users, many of them in the emerging markets. It makes more than €40bn a year from repeated, reliable service revenue. Maintaining sales requires little operating expenditure meaning the group is able to convert huge amounts of its profits into cash and is therefore a generous dividend payer.

Vodafone cash and profits 2014 to 2018

 2014 (£bn)2015 (£bn)2016 (€bn)2017 (€bn)2018 (€bn)
Operating Profits(3.91)1.971.323.734.30
Net Profits59.45.92(5.12)(6.08)2.78
Operating Cash Flow6.239.7210.514.213.6
Free Cash…

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