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Vodafone

General discussions about equity high-yield income strategies
Bouleversee
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Vodafone

#221329

Postby Bouleversee » May 13th, 2019, 4:11 pm

Walrus posted what sounded like a rather a panic-stricken (though could have been tongue-in-cheek) comment on HYP practical which was considered not to be the right place for his comment, so I am continuing here, though I am not sure this is the right place either. I take the Sunday Times and read the comments about the "expected" cut in dividends which would be a volte face after its November signal that it would protect the dividend. The article also said that "analysts have already priced in a dividend reduction: a survey of investors by JP Morgan found that 61% were in favour of a cut, with analysts at Redburn expecting a 50% drop from 15p to 7.5p." As others have said, the cut is just speculation (needless to say VOD have declined to comment). On the one hand, I couldn't help noticing that the s.p. had fallen around nearly 5.5% today last time I looked, so not totally priced in then; on the other hand, a dividend cut would not surprise me at all and in all the circumstances it would make sense. I see no merit in paying unsustainable dividends rather than reinvesting the held-back cash in a way that is likely to ensure that they might (affordably) be increased in the future and/or prevent it from going bust.

Maybe, just maybe, Walrus got in just a bit too early and today would be the day one ought to think of topping up but there are too many known unknowns as well as known knowns, never mind unknown unknowns, for me to be tempted to risk any more at my age. I wonder what the odds on a dividend cut are at the moment. I was surprised by BTA's and CNA's decision to hold theirs. We won't be kept in suspense for long, however.

monabri
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Re: Vodafone

#221341

Postby monabri » May 13th, 2019, 4:59 pm

In the words of the other Doris (Day)...

#Que sera sera.

perhaps appropriate today!

Bouleversee
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Re: Vodafone

#221347

Postby Bouleversee » May 13th, 2019, 5:15 pm

monabri wrote:In the words of the other Doris (Day)...

#Que sera sera.

perhaps appropriate today!


Indeed. I'm not quite that old, however. I was surprised to hear she was still around (till today, that is).

tjh290633
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Re: Vodafone

#221395

Postby tjh290633 » May 13th, 2019, 7:49 pm

With Vodafone reporting tomorrow, there are two items of conjecture.

First, will the dividend be cut or maintained?

Second, how will the share price react?

On the evidence of recent market behaviour, one might predict a fall if the dividend is held and a sharp rise if it is reduced. Tomorrow will be an interesting day.

TJH

Bouleversee
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Re: Vodafone

#221407

Postby Bouleversee » May 13th, 2019, 8:47 pm

FWIW ADVFN's evening report contained the following:

In equity markets, Vodafone was the worst performer throughout much of the session after an article in The Sunday Times suggested that the company was ready to slash its dividend to pay for 5G investment.
Commenting on that possibility, analysts at Berenberg told clients: "the much faster de-leveraging that a dividend cut brings might be the catalyst that attracts fresh money to the story [of the company's stable fundamentals]."
But the German broker stopped short of anticipating a cut.

I hope the 5G investment is worth it. Do you think we might get to the stage where pretty well every interview on the today programme isn't ruined by a dodgy line? (And those that aren't are interruped by the interviewers instead.)


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