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"They haven't cut the dividend for 11 years"

I think you mean 23 years!

jackdawsson, I mentioned 32B was their long term debt as this is what is used in the calculation of the D/E ratio. Short term liabilities (payables, etc..) make up the rest of the debt which are well covered by current asset.

I don't really understand all this fascination with the debt of VOD.. are people just looking at the overall figure and thinking "Oh, 32 billion is a lot of money" or does anyone have a modicum of financial understanding?

The D/E (LT debt to equity) TTM for Vodafone is 0.49 with is more than healthy for a company this size, they would have to add another 33 billion of debt to get over a D/E of 1 (which is still not alarming). The current ratio is also under 1 which means the current assets cover the current liabilities.

From the Motley Fool yesterday:

One thing investors don’t get from Tracsis is a high dividend yield. It’s just 0.3% on this year’s payout of 1.6p — although it’s rising fast (up 14% from last year) and is covered a massive 16.5 times by earnings. In contrast, Vodafone’s generous dividend has always been a big attraction, and at the current depressed share price of 147p, the yield on offer is higher than ever. Its last payout of 15.07 euro cents (13.2p at current exchange rates) gives a running yield of 9%.

Now, the payout wasn’t covered by earnings of 11.59 euro cents (10.1p). However, it was covered by free cash flow. Nevertheless, with Vodafone planning to increase spending to acquire spectrum over the next couple of years and also having agreed to buy €18.4bn of assets from Liberty Global (expected to complete mid-2019), the market evidently fears for the dividend, even though the consensus among City analysts is positive. The way I see it, if Vodafone can get over the hump of the upcoming expenditure on higher borrowings, while maintaining the dividend, the returns for investors could be spectacular. And as I wouldn’t see a reduced dividend as the end of the world, I rate the stock a ‘buy’.

WPP’s Read on merging agencies and turning around North America:

https://www.mmm-online.com/home/channel/agencies/mdc-partners-posts-loss-of-18-2m-in-q3/

IMO a big shakeup is happening internally, the SP is already at a good margin of safety and I see little downside to buying at these prices. Yield is also a whopping 6.8% if they maintain or grow the dividend, which they have been doing for 25 years and have a comfortable cushion to keep doing.

Ok guys, we're might be growing 0.5% less than we initially estimated.
..
..
OMG WPP is going bankrupt!! SELL SELL SELL!! Stock tanks 20%

Gotta love Mr Market! Give me my 6.5% yield on cost dividend :)

Down 16.5% on reduced guidance, hugely blown out of proportion IMO and good buying opportunity. Divi is still well covered by FCF and earnings.

No fresh news on DOM yet SP keeps going lower and lower.. perfect time to load up on more of this great stock backed by solid fundamentals!

SP took a hit from revised targets on NGPs and currency warnings today.. Still undervalued IMO and steady cash flow will guarantee the dividend for a long time to come!

Never smoked a cigarette in my life but god bless all you smokers!! :)

I've calculated the intrinsic value of Vodafone based on 2 methods:

1. DCF using Free cash flow
- Next 5 years FCF growth of 2%
- Long term growth rate of 4% once all the heavy investments are amortized
- Discount Rate 10%

RESULT: 2.33 GBP

2. Gordon Growth Model using Dividend growth rate
- Dividend growth rate of 4% which is less than historical figures
- Next dividend of 0.16
- Discount Rate 10%

RESULT: 2.67 GBP

Based on this I do not find it worthwhile to obsess over daily fluctuations, in the short term the stock market is a voting machine but in the long term it is a weighing machine.

OMG the SP rising this much means market makers are pricing in some amazing news!! Will they be doubling the dividend next year? Or something even better?!

/s

Long VOD on fundamentals not on short term vicissitudes

"I'm no tax expert but look at a W-8BEN for to reduce it to 15%."

Gerry, you're right. Except I currently reside in a country with no DTA with the US so this does not apply. On the bright side there are no income or capital taxes where I live so as long as I invest in dividend friendly countries like the UK, HK, Singapore I get to keep 100% of the divi

"Not in Amazon’s world...........you gonna sound prehistoric to most Americans!"

Americans withhold 30% of my dividend before I even see it, they can kiss my prehistoric ass!

Mrd, you're not down as long as you don't sell, they'll just keep throwing off cash dividends your way while you wait.

Revenue is vanity, Profit is sanity, Cash is reality ;)

Toff, agreed that the dividend is never 100% guaranteed, but the fundamentals do not indicate anything alarming signaling financial difficulty. Cash flow is steady and debt is well covered. I'm guessing the stock is tanking out of fear in the market, we'll just have to wait and see..

The share price dropping as it is now is a blessing to us dividend growth investors, as each time you buy your yield goes up. I'm buying this as a pure income stock and could care less about capital appreciation. When I buy a stock my favorite holding period is forever.

Anyone who's worrying about the dividend being cut (included the geniuses at Jefferies) needs to learn how to read a balance sheet or a cash flow statement. VOD's D/E ratio is below 0.5 and their current ratio is around 1, which means both short term and long term debts are covered by current assets and equity.

Furthermore the dividend is payed out from Free Cash Flow, not earnings. Vodafone despite all the doom and gloom is a cash generating powerhouse and the FCF payout ratio is 72% which means they can even grow the dividend if they wanted to.

With it's 23 year unbroken streak of dividend increases Vodafone is a dividend aristocrat, my suggestion is to look at the fundamentals not short term fluctuations. Long VOD!