DEUTSCHE TELE AG ADS Message Board
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Dividend Payout ratio is 238%
How will DT be able to afford to pay such a large dividend when the payout ratio is over 200%? A conservative ratio would less than 40%. To pay out more than twice the profit means burning cash right?
Someone please explain what's going on here and why people expect the dividend to remain intact.-
For this year Value Line estimates div at .99, earnings as .95, and cash flow at 4.60. They anticipate earnings growth in double digits in next few years. They rate stock as timely and safe (2 and 2).
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if such a high payout ratio burns cash is the wrong comparison. for this one has to compare dividends paid with the free cash flow rate not eps
- 1 Reply to wildlife8888
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There is also this euro vs DOLLAR exchange rate,it looks like our greenback is gaining strength/
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You know they don't do quarterly dividends right? Based on only two analyst estimates, they are expected to earn 1.04 EPS. If they pay the 1.26 dividend, that will be a ratio of 120% or so. Again, that's if TWO analyst mean estimate is right on, which is usually never the case, and that's if their annual dividend remains the same. I honestly wouldn't be too upset if the dividend is 80 cents to tell you the truth at the price I got my shares at. Payout ratio isn't everything either, free cash flow is more important. Last year was a gain of 826 million dollars AFTER dividend were payed. DT has a little over 3 billion dollars on hand. Lets just say it's safe to say that DT will be paying a dividend that's over 7% this year.
- 1 Reply to dacoolest6
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Thanks so much. I friend of mine owns a lot of shares and asked me what I thought about the safety of the yield--I immediately saw the huge payout ratio posted in Yahoo Finance and warning bells went off. Thanks for enlightening us and for the vote of confidence in the yield.
Cheers!
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Sure Mr Buffett. It's skewed from the first quarter on one time charges.
- 1 Reply to dacoolest6
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meant 4th quarter
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