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This is good though right? Because the buybacks have more impact if the share price is at 40p than at 80p.
Rob
''i suspect it will be of no benefit whatsoever''
it is a 4 Billion euro benefit to shareholders.
Longtimeinvestor
how much do you think these buybacks would increase the share price
I suppose it depends how long you intend being invested here, in the short term probably zero
So for anyone like myself who just wants to see this rise as quickly as possible i suspect it will be of no benefit whatsoever, I suppose it depends on how rewarding you think this investment will be in the coming years or not, each to his own i suppose
Euro is planned to be spent on buybacks for cancellation. That equates to getting on for 20% of the current market cap, so that gives an indication of how much each share would rise in price if the market cap remained constant, over that long period with such a removal of shares from the market. Obviously that is unlikely Vodafone will more likely have a lower or higher market cap in a couple of years time.
Long
''Still, the div is reduced to 4.5c later this year regardless of how many shares. I am going to miss that income as an investor''
The first reduction will be the February 2025 payment. The reduced forward dividend yield based on the current share price will still be above the ftse 100 average. Billions are planned to be returned to shareholders via buybacks, which makes a great deal of sense whilst the valuation is very low, and it also gives more flexibility.
''Still have UK 3 to look forward to but that might be after the election.''
News to move the process along is due on Friday. A UK merger with 'three' will be a of good benefit.
Rob
''how much do you think these buybacks would increase the share price''
the sole purpose of a return to shareholders by way of buybacks for cancellation is to reduce share capital.
The value of each share will depend upon the value that the market places on the Vodafone business divided by the number of shares in issue. The market value fluctuates each day.
'I would rather that money was invested on reducing the share count, and therefore in the future having monies allocated to dividends being available to fewer shares than stuck in an asset making no returns. '
Still, the div is reduced to 4.5c later this year regardless of how many shares. I am going to miss that income as an investor
On a positive, what is left in europe after getting rid of italy and spain , is growing at 3% pa.
Still have UK 3 to look forward to but that might be after the election.
Holding for now
Longtimeinvestor, how much do you think these buybacks would increase the share price and how long would it take
Have they said when the buy back will start?
Mole
''that suggests a buyback has zero effect, possibly negative effect, if you are using assets to buyback the stock.
It only works if ''
it appears that there are endless s amount of people who are clueless about buybacks for cancellation.
They work every time - to reduce share capital. The market values Vodafone on a daily basis. That worth is represented by the number of shares in issue, giving a price per share.
I would rather that money was invested on reducing the share count, and therefore in the future having monies allocated to dividends being available to fewer shares than stuck in an asset making no returns. The return/value to shareholders goes into the remaining shares.
Jest
''And yet the share price is practically back to where it was before.''
it closed on Thursday at 66.09p - currently 67.33p.
The share price did not plummet on Friday with news of pulling out of Italy, halving the dividend with buybacks to take place
Avoset 321, you is verey funy pre tending you doesn't wante the shar price to go up.
Hillarious ly you is also a gras, got me baned for a short tyme just for sayin negro witch ain't wasist in my booke...
That argument was raging when it was 1.20 and the previous buyback in full swing. The evidence from that suggests a buyback has zero effect, possibly negative effect, if you are using assets to buyback the stock.
It only works if excess capital generated from earnings is being used.
Vod closing Sp 22nd March
Bobrad 70p
Added to list Entries Closed Closed Atb
Probably both. Besides, he certainly already owns or will receive at least as many Vodafone shares based on the incentive plan. To me that means that he really believes in the buyback story.
The CFO has spanked £1.7 M on VOD shares…he is either paid too much or believes in the share buyback story
To the contrary Gutterclown.
For the buybacks to have maximum effect, we want the share price as low as possible.
We know the low SP is only artificial, but for what it is worth, if it could go lower for the buybacks would be ideal.
Nuthin will make this go up agane sadley.
I is loosing all hop.
The previous charts assume stock prices and dividends stay the same over the period, halving the dividend yield, like Vodafone have just done, doubles the catchup time.
The charts aren't meant to be a real world example, they are aimed at demonstrating the power of dividend reinvestment when the price drops.
"Why even be in the FTSE 100 at all with a divi yield below the risk-free rate and no growth stocks"
Actually reinvesting Dividends is an form of growth, especially when P/E's are low and dividend yields high. BT ticks both of those boxes. A while ago I built some charts to show the difference between two Fleccy's in parallel universes, in one Universe the price halved. In Fleccy 1's Universe the price held at £2 after the initial purchase, whereas the price halved in Fleccy2's Universe.
Both Fleccy's bought 50,000 shares for £100,000 at a purchase price of £2 a share, Fleccy2's shares saw a 50% drop in price soon after purchase. Both Fleccy's reinvest their 7.7p a share dividend year after year going forward.
Comparison of share valuation with 7.7p Dividend reinvestment
https://docs.google.com/spreadsheets/d/e/2PACX-1vRYwu6rv7Vk2093vnE9975iJIfiNBDGYW08VmYU2MK2tsi0o9bA3rDwV9NV0XA6QJrkQeqet_jppwWg/pubchart?oid=1399088825&format=interactive
Number of shares held after each reinvestment
https://docs.google.com/spreadsheets/d/e/2PACX-1vRYwu6rv7Vk2093vnE9975iJIfiNBDGYW08VmYU2MK2tsi0o9bA3rDwV9NV0XA6QJrkQeqet_jppwWg/pubchart?oid=933652602&format=interactive
Annual Dividend Growth with each reinvestment
https://docs.google.com/spreadsheets/d/e/2PACX-1vRYwu6rv7Vk2093vnE9975iJIfiNBDGYW08VmYU2MK2tsi0o9bA3rDwV9NV0XA6QJrkQeqet_jppwWg/pubchart?oid=305726335&format=interactive
"The Vodafone share price went up on the news of the Italy sale , dividend cut and buybacks and the CEO is still in place. "
And yet the share price is practically back to where it was before.
"'is selling core business units and doing buybacks.''
Not sure if part of a portfolio not make a profit can be classed as much of a core 'business'. "
Vodafone Spain and Italy were core as much as they were in the same business in those countries as they are in the UK etc. They just couldn't get a decent return in those countries as they struggled to complete, so getting rid was probably better than further managed, or mismanaged, decline.
Pc
''Lower dividends from next year
"next year"...... starts with the H1 dividend for H1 ending 30th September 2024 (this year)''
??
Full year results are not until May - I am expecting a final dividend of 4.5c payable in September
"What pensioner goes from the high risk of investing in a single stock for its dividend yield, to the security of an annuity and loss of capital?"
Why even be in the FTSE 100 at all with a divi yield below the risk-free rate and no growth stocks...There's a reason the index remains so unloved by big money.
Jes
''is selling core business units and doing buybacks.''
Not sure if part of a portfolio not make a profit can be classed as much of a core 'business'.
Vodafone are doing an 'Aviva', who simplified their business by selling off assets, and are now continually purchasing back their own shares. These actions have been a great benefit to shareholders.
''What would happen if Apple or Netflix announced they can't make a profit in Europe so they need to cut back and focus on other markets. There would be a plunge in share price, a change in CEO''
The Vodafone share price went up on the news of the Italy sale , dividend cut and buybacks and the CEO is still in place.
''Like with BT, main hope here is eventual takeover ''
Complete nonsense