Any views on the BT dividend?

Blah99

Here we go. BT gapped down and will fill in, but the trend is clear. People are staying well clear because a dividend cut is expected. A nice little fine from the European Commission won't have helped sentiment.

BT will rebound, but not for a while. We'll see a short term pull back because it's a bit oversold at the moment, but the downtrend will continue. Compared to C&W, which is holding value (and strangely suffered a bit after confirming it was going to meet forecasts), BT is not a good choice at the moment. In my opinion, of course, and we ornithologists are often wrong about such things.

Blah99

Oh look, I was right :rolleyes:

BT on Thursday said it would axe 15,000 jobs, more than expected, and cut its final dividend by nearly 60 per cent – the first reduction in seven years – after an “unacceptable” performance at Global Services, the UK telecoms group’s troubled IT services division.

http://www.ft.com/cms/s/0/ccc4e94e-404d-11de-8f18-00144feabdc0,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html

Now go chart BT against C&W. See, we professional windowcleaners know what we're talking about when it comes to telco shares.

sabretoothtigger

Slash and burn
Results from BT this week gave a salutary lesson on relying exclusively on stock screening tools to make investment decisions. Prior to the results, the stock’s dividend yield was nominally 16.5% versus a benchmark (on an historic basis) of 5.3% for the market as a whole.

The huge disparity in yields was telling us that a dividend cut was imminent, and so it proved. The telecoms leviathan suffered a 40% slump in pre-tax profit during the fourth quarter, forcing the firm to slash its final dividend to just 1.1p. (Read more: BT slashes divi; 15,000 jobs to go)

JoeCrystal

Still, while BT Group's share price is suffering, I reckon it is at good price. I will be purchasing BT Group's shares along with Cable & Wireless' shares. I am not remotely worried about BT Group's dividends cut since I am not depending on them. Good time to buy low.

Pssst

OK so they have been forced to adopt a slash and burn policy and there will be some short term pain but the company will emerge all the better for it once it concentrates on its core home markets.

sabretoothtigger

They lack focus, I'd agree its a good or better time to buy as they are a major utility after all but that depends if they can actually do any better in future. Theres better things to buy

Peston on BT
http://www.bbc.co.uk/blogs/thereporters/robertpeston/




I'd buy into their old mobile division which is owned by Spanish Telefonica. Much better looking, 5% dividend with cover of 2

O2 soars as its sells 1m Apple iPhones

Mobile phone operator O2 has reported a 10.6pc jump in full-year sales thanks to the "phenomenal success" of the Apple iPhone.



By Rupert Neate
Last Updated: 7:32PM GMT 26 Feb 2009


O2, which is owned by Spanish telecoms giant Telef!nica, has sold more than one million iPhones in Britain since it signed an exclusive agreement with Apple in November 2007.
Matthew Key, chairman and chief executive of Telef!nica Europe, said O2 added 1.1m mobile customers in 2008 to take its subscriber base to 19.5m.

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/4840209/O2-soars-as-its-sells-1m-Apple-iPhones.html

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=26554&username=sabrehbos&ac=211463&tc=

Fella

Pssst wrote: »

OK so they have been forced to adopt a slash and burn policy and there will be some short term pain but the company will emerge all the better for it once it concentrates on its core home markets.

Don't bank on this.

I worked at BT for 21 years & I can tell you they are a company in serious trouble. Morale was easily EASILY the worst it's ever been before yesterday's announcement. BT Management are clueless & flailing about in all directions & have been for quite awhile.

They are desparate to cut costs & this is the logic they are using to try to do so:

1. "We have thousands of contractors (Agency staff)"

2. "We have thousands of redeployees (aka people in the "skills pool" aka the CTC)"

3. "Let's get rid of the contractors & backfill them with the redeployees."

Unfortunately for BT this stunning piece of logic completely ignores the fact that the skillset of the redeployees bears no relation whatsoever to the skills BT is losing when their contractors go. This means you now have a situation whereby redeployees are being more or less forced to accept roles they simply cannot do. Net result? The redeployees suffer. The rest of the staff suffers more (their workload just became much worse). And the business suffers worst of all.

Anyone who utters the slightest word against this strategy faces accusations of "not being a team player" & "being negative" etc etc.

Add to that the fact that the BT pension deficit may very well be FAR worse than it's currently being portrayed & you begin to see that it's not simply a case of buying now at sub-£1 & then waiting until the "inevitable" upturn.


Link on the pension deficit: http://uk.reuters.com/article/domesticNews/idUKTRE54D1CP20090514



In summary I'm not saying it's impossible that BT will recover over time, but it's certainly not guaranteed. There are equivalently juicy yields all over the place right now with none of the accompanying bad news that comes with BT.