Vodafone’s dividend is its thorn and its jewel
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 Cash Flow||6.23||9.72||10.5||14.2||13.6|
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