A Review Of European Telecom Yields And Outlook

For income investors the telecommunications sector is a popular choice, given that is usually considered defensive because it is resilient to economic cycles, it's very profitable, has a strong cash flow generation capacity, and pay high dividends to shareholders. However, in Europe this sector hasn't been performing as expected over the past few years, with many investors being attracted by high-yields but suffered from widespread dividend cuts. Large telecom companies like Telefonica (TEF) or Orange (ORAN) canceled or cut their dividends, proving that their double-digit yields were not sustainable. On average, the European telecom sector still offers an attractive dividend yield of 4.1%, with Orange offering the highest-yield within the largest operators at close to 8%. Company ORAN TEF TLSNY TELNY VOD DTEGY PT BT TI KKPNY Div. Yield (%) 8.0 6.0 5.8 4.7 4.5 4.1 3.7 2.8 1.2 0.4 In 2013, the sector has rebounded due... Read more