A Vodafone dividend cut may be on the way and the talk has VOD stock falling on Monday.
According to these rumors, Vodafone is preparing to announce the dividend cut in the near future. The rumors claim that the company will be cutting its dividend to give it extra funds. It will then use this money to fund its expansion into 5G networks.
Vodafone making an announcement about its dividend soon makes sense. The company is getting ready to release its earnings report for its fiscal fourth quarter of 2019. This will come out tomorrow with a webcast starting at 9:00 a.m. British Standard Time.
So how much of a Vodafohne dividend cut can investors expect? Some analysts are expecting the that the dividend cut could be as much as 50%. This would drop the company’s dividend down from 15 pence per share to 7.5 pence per share.
“Its underlying markets remain ‘challenging’ and it has very little financial headroom despite synergies and cost cutting,” RBC Capital Markets said back in January in a statement obtained by telecoms.com. “Vodafone has options with its towers but faces a threat from 5G spectrum. The dividend is unsustainable even before we consider a macro downturn.”
The possible Vodafone dividend cut is especially bad for the company after promising investors it wasn’t going to go this route. The company made this commitment in a statement from November 2018.
VOD stock was down 6% as of Monday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.