By Roger Choudhury
We scoured the world for giant dividends from the telecom sector. Each one on this list holds a dominant position in its home country with regulatory barriers to entry and significant infrastructure investment that protect cash flows. Many of these operate outside the US, just likethese 13 emerging market dividend stocks. Here’s what we found, plus some commentary on each:
Magyar Telekom (MYTAY.PK) paid a one-time dividend of $1.661 per share in 2010, which is a dividend yield of 13.7%. On December 13, 2010, the Company announced that it will pay a dividend of roughly $0.253 per share. This is a current yield of 1.9%. This is subject to change for the higher because the final say will be at the 2011 Annual General Meeting in April. Also, revenues were down by 5.8% to 452.6 billion Forint ($2.29 billion) in the first 9 months of 2010 compared with the same period in 2009. The share price is under $13.50, and the 52 week range is $11.90 - $21.82. The price took a hit since the downgrade of Greek sovereign debt. Keep in mind that shares trade at a P/E of 8.2, so you may be in for some good capital appreciation. The Company is the principal supplier of telecommunications services in Hungary, Macedonia, and Montenegro, and alternative service provider in Bulgaria, Romania, and in the Ukraine. For investors bullish on Eastern Europe, Magyar is worthy of a closer look.
France Telecom (FTE) proposed a dividend of 1.40 Euros ($1.914) per share for the fiscal years 2010, 2011 and 2012. This is a current yield of 8.4%. In the first 9 months of 2010, revenues fell by 1.7% to 33.7 billion Euros ($46.08 billion). Also, the 52-week trading range is $17.26 - $24.69. Shares are trading around $22.50 with a P/E of 15. The Company is a France-based telecommunications operator that serves 203.4 million clients around the world. France Telecom was one of our 10 new dividend “kings” for this year.
Cellcom Israel (CEL) paid $3.59 per share in dividends in 2010. That’s a yield of 10.9%. Quarterly dividends are irregular in amount, but have been paid since 2007. Revenue increased by 3.2% to $5 billion New Shekels ($1.38 billion) in the first 9 months of 2010 compared with the same timeframe in 2009. EPS grew by 6.5% under the same comparison. The 52 week trading range is $24.51 - $36.41. The Company is a cellular communication services provider in Israel with 3.376 million subscribers.
Frontier Communications (FTR) has paid quarterly dividends since 2004. The next ex-dividend date is March 7. The current yield is 7.9%. Revenues for the first 9 months in 2010 are $1.596 billion. The same figure in 2009 is $2.438 billion. This is a marked 52% increase. However, EPS decreased from $0.37 to $0.18 in the first 9 months of 2009 to 2010. The 52 week range is $6.96 - $9.84. Currently, shares trade under $9.50 with a P/E of 33. The Company is the largest pure rural telecommunications carrier in the US.
Advanced Info (AVIFY.PK) pays dividends twice a year. The first dividend payment is paid as an interim dividend, which will be distributed from the operating results of the first half period of the year. The second dividend payment is paid as an annual dividend, which will be distributed from the operating results of the second half period of the year. The Company aims to pay dividends of at least 100% of net profit. Historically, over 100% of net profit has been paid out during the past four years. Shares go ex-dividend on April 5 for payment on May 6 in the amount of $0.10 per share. In 2010, 15.5 Baht was paid out, which yielded 17.9% according to today’s exchange rates. Also, in 2010, revenue grew by 8.6% to 111.2 billion Baht ($3.6 billion) and EPS shot up by 20.3%. Shares currently trade under a P/E of 12. The 52 week range is $2.08 - $3.40. The Company operates a cellular mobile phone network based in Thailand. The Company has a 52% market share, measured by revenue.
Partner Communications (PTNR) paid dividends per share of 16.82 in New Shekels ($4.654) in 2010. This is a current yield of 22.9%. Their dividends are paid out quarterly. Revenues are up by 9% to 4.9 billion New Shekels ($1.36 billion), and EPS grew by 9.4% in the first 9 months of 2010 compared to the same timeframe in 2009. Fiscal year 2010 results are to come out on Wednesday, February 23. Shares are trading down 0.3% over the past 5 days. Shares currently trade under $20 with a P/E multiple of 8.8. The Company is a mobile telephone network operator in Israel with the brand name of Orange. In addition, the Company has a 32% market share.
Telecom Corp. of New Zealand (NZT) pays a dividend of $0.133 per ADR share on March 18 with an ex-date on February 22. A supplementary dividend of $0.023 will also be paid in the same fashion. Consecutive quarterly dividends have been paid since 2002, but they are irregular in amount. In 2010, the dividend yield was 8.4%. From August thru September 2010, revenues are down by 2.9% and EPS fell by 41.7% relative to the same period in 2009. In June 2010, FY 2010 ended, where revenues decreased by 5.8% to 5.2 billion New Zealand Dollars ($4.0 billion) and EPS went down by 9%. Share prices have traded between $5.90 and $8.94 in the last 52 weeks. Shares now trade under $9. The Company is a supplier of telecommunications and information, communication and technology services in New Zealand and Australia.
Deutsche Telekom (DTEGY.PK) pays dividends on an annual basis, typically in April or May. The Company aims to pay 0.7 Euros ($0.957) in dividends annually through 2012. In 2010, the dividend per share was 0.78 Euros or a yield of 8.3%. Also, revenue fell 3% to 46.9 billion Euros ($64.194 billion) in the first nine months of 2010, but EPS rose by 550%. Fiscal year 2010 results will be announced on Friday, February 25. For shares, the 52 week trading range is $10.57 - $14.77. It now trades under $14 with a P/E of 19.3. The Company offers telecommunications and IT services to clients around the world. T-Mobile is one of its renowned brand names. For more information on this company, check out recent article here.
Windstream (WIN) has paid $0.25 in quarterly dividends since Q4 2006. The next ex-dividend date is March 29 for payment on April 15. The current yield is 7.9%. As reported on Friday, February 18, in 2010, total revenues, adjusted for acquisitions, dropped by 2.2% to $4.1 billion, and EPS fell by 12%. Shares declined by almost 5% on Friday to $12.57. The Company provides phone, high-speed Internet and digital television services. It also offers to businesses and government agencies a range of Internet protocol-based voice and data services, and phone systems and equipment. It has operations in 23 states.
CenturyLink (CTL) will pay a dividend $0.725 per share on Friday, February 25. The current yield is 7%. Also, the Company has paid dividends since 1991. Operating revenues increased by 69% to $5.3 billion in the first 9 months of 2009, but EPS fell by 4.4% from $2.50 to $2.39. Moreover, the 52 week trading range is $14.16 - $46.87. Shares are now trading over $41 with a P/E of 13.1. The Company provides telecommunications services, including local and long distance voice, wholesale local network access, high-speed Internet access, other data services and video services. It is also a Fortune 500 company.
If you’re looking for some income ideas outside the telecom sector, we recommend checking out these 7 shipping stocks that yield over 5% or these 7 high-yielding bank preferred shares. And as always, please do your own due diligence before taking a position in any of the names above.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
We agree with your assessment and choices.
We generally prefer investments in American telecoms, rather than foreign equities, because they provide much needed domestic employment and contribute to our economy... and the dividends are fair to good.
Thank you.