New Zealand Telecom has one of the highest dividend yields in the Telecom Stocks section of our High Dividend Stocks by Sector Tables, with a 9.54% dividend yield currently. However, they just declared a quarterly dividend for Q3 Fiscal 2010 of $.2122/ADS, which works out to almost 85 cents annually. NZT closed Friday, May 7th, at $7.44/ADS, which would make their forward dividend yield approx. 11.29%.
The ex-dividend date is May 18th, and the payment date is June 11th. (One ADS, American Depository Share, equals 5 Ordinary New Zealand shares, and 1 New Zealand $ equals 0.714850 US $ ). (NZT pays dividends quarterly.)
NZT is targeting a 90% dividend payout policy, and reiterated in today’s earning release that they intend to pay the equivalent of $.8488 per ADS in dividends in 2010. They see 2010 earnings as being -1% below 2009, which would equal about $.89/ADS, which would put their forward dividend payout ratio at 96%. A 90% dividend payout on $.89 would equal $.80/ADS, which is still a hefty 10.77% dividend yield.
NZT reported Q3 fiscal earnings results today that were generally in line with their previous guidance, and maintained their full year guidance. Their market share of fixed broadband was steady at 57%, and they had 7% mobile revenue growth.
Concerning valuation, NZT has one of the lowest P/E’s in the Foreign Telecom group, and its stock price is up less than 1% for the past 12 months. If you’re looking for foreign dividend paying stocks with high dividend yields, you may want to consider NZT. (There are no options available for NZT).
Disclosure: Author is long shares of NZT.
Disclaimer: This article is written for informational purposes only.
Disclosure: Disclosure mentioned: Author is long NZT shares