The exceptional potential of Vodafone Group’s (LSE: VOD) broad global network convinces me that dividends should continue to mash those of the broader market.
The telecoms star has long offered up delicious dividend yields, and the City expects this trend to keep on rolling. A payout of 12.5p per share is forecast for the year to March 2017, up from 11.5p last year and yielding a splendid 6%.
The number crunchers expect dividends to remain around this level in fiscal 2018, although rewards look likely to surge following this period as earnings growth clicks through the gears — the bottom line is predicted to rise 8% and 18% this year and next alone.
Vodafone has experienced some difficulties in its lucrative emerging markets more recently, particularly in the Indian marketplace from where it sources more than a third of revenues from the aggregated Asia, Middle East and Asia Pacific (or AMAP) region.
Sales in India dropped 1.9% between October and December as budget competitor Reliance Jio ramped up its attack. But Vodafone has since struck back, tying up a merger with Idea just this week to create the country’s largest operator and boost the rollout of its 4G and 5G services, as well as its position in fast-growth areas like the Internet of Things (IoT) and mobile money services.
And Vodafone’s huge investment via organic programmes and M&A activity — both in its traditional European heartlands and in lucrative emerging regions — bodes well for shareholder returns in the long term as the world becomes ever-more-closely connected.
I believe the firm has what it takes to keep delivering massive dividends long into the future.
Pocket ace
Betting beauty 888 Holdings (LSE: 888) saw its share price go gangbusters this week following the release of barnstorming full-year financials.
But despite the stock hitting fresh record peaks of 250p per share, I reckon the business still offers plenty of value for money, and particularly for income chasers.
The gambling star announced this that revenues strode 13% higher in 2016, to $520.8m, with sales at its Casino and Sports divisions shooting 21% and 49% skywards from the prior period. As a result, pre-tax profits pounded to $59.2m, up 82% year-on-year.
888 is demonstrating remarkable strength across its foreign marketplaces, with revenues in Spain leaping 45% in 2016 — the Iberian state is now the company’s second-biggest territory — while sales in Italy leapt an even-more impressive 66%.
And 888’s huge investment in technology is also paying off handsomely, and betting made via mobile devices accounted for 60% of total UK revenues last year. This is up from 47% the year before.
For 2017 888 is expected to pay an ordinary dividend of 14.2 US cents per share, up from 8.9 cents last year and yielding a terrific 4.5%. And this moves to 5% for 2018 thanks to predictions of a 15.8 cent reward.
I reckon investors should expect dividends from 888 to keep heading north given the exceptional momentum seen across the business.
