Telefónica, Orange and Vodafone, the three major operators in the Spanish market, are currently immersed in separate processes for the payment of dividends. Despite the deterioration of business in the different countries, due to the strong pressure of competition, the companies maintain this race to attract investors. Between the three, the amount allocated to dividends, between cash and shares, is around 6,500 million euros per year.
In this sense, Telefónica has begun this week the execution of the payment of the second tranche of the 2021 dividend, for an amount of 0.15 euros per share, through the modality of script. The payment is added to the 0.15 euros per share, paid in December of last year, bringing the total dividend to 0.30 euros per share. At present, and after the rebound on the stock market since the beginning of the year (the matildes up 28% since the beginning of January), Telefónica’s dividend yield is around 6.05%.
In the first tranche, the shareholders holding 34.98% of the free allocation rights accepted the irrevocable commitment to purchase the rights assumed by Telefónica, which disbursed 291 million euros. In turn, the teleco increased capital by almost 141 million titles, 2.50% of the capital, to reward investors who chose to collect in shares.
For next year, Telefónica plans to also pay 0.30 euros per share, in two tranches, but now entirely in cash, once the uncertainties surrounding the pandemic and the 5G spectrum auctions that led the group to resort to script. The total disbursement, with the current share capital, will be around 1,700 million euros. In addition, Telefónica has resumed the tactical repurchases of its own shares in the market, to protect the price of the securities; operations to which it allocated around 500 million euros in 2021.
The Orange shareholders’ meeting approved last week the payment of a dividend charged to 2021 of 0.70 euros per share, in cash. The teleco, in the process of merging in Spain with MásMóvil, in the largest corporate operation of the year in the sector in Europe, already paid an interim dividend of 0.30 euros per title in December. On June 9, it will pay another 0.40 euros per share, to fulfill its commitment. The teleco allocated a total of 2,300 million euros to dividends in 2021, compared to 1,800 million in 2020.
For the next fiscal year, the shareholders’ meeting must vote on the payment of a dividend for the same amount of 0.70 euros per share. Orange’s intention, however, is to pay an interim dividend of 0.30 euros per share in December this year.
At this time, Orange’s dividend yield is 5.92%. Its shares have also accumulated a revaluation of 25% since the beginning of the year.
In this race, Vodafone is also in the process of paying a dividend. The board of directors has recommended the payment of nine euro cents per share, of which 4.5 cents have already been paid. The rest will be paid in the coming weeks. In the presentation of his accounts, a few days ago, he recalled that investors must be registered by June 6 at the latest to receive this remuneration, which will become effective on August 5.
In the last financial year, Vodafone allocated 2,500 million euros to the payment of dividends. In addition, the company allocated another 2,000 million to the execution of its share buyback plans.
At this time, the British operator’s dividend yield is 5.27%. Titles are up this year by around 17%.
Pressure. Cash generation in all European operators has been pressured in recent times by the rise in inflation, as well as the increase in investments by telecoms for fiber and 5G deployments. According to Bloomberg Intelligence, the payments of these remunerations are assured, although any increase is limited, except in companies such as KPN, Tele2 and Deutsche Telekom.
surprises. Deutsche Telekom’s ability to pay dividends could increase more than expected, thanks to its ability to generate cash. The teleco paid a dividend of 0.64 euros per share in mid-April, above the 0.60 euros paid in each of the two previous years. The total disbursement made by the German operator was around 3,182 million euros.