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BT Group Lifts Dividend By 14% to Yield 3.1%

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LONDON -- The shares of BT Group  (LSE: BT-A  ) (NYSE: BT  ) soared 10% to 302 pence during early London trade this morning after the communications giant revealed pre-tax profits surging 11% to 2.7 billion pounds.

Britain's leading fixed-line telecoms company reported a 5% decline in full-year revenues to 18.2 billion pounds. The company said it continued to make cost savings, slashing 6% of operating costs in 2012, excluding transit.

BT reduced its net debt by 14% to 7.8 billion pounds, and announced it would buy back 600 million pounds of its shares over the next two years.

In light of these positive results, BT hiked its full-year dividend by 14% to 9.5 pence per share, from 8.3 pence last year. Additionally, the company said it plans to increase this dividend by 10%-15% for the next two years.

Chief executive Ian Livingston said:

We are doing what we said we would do. In an environment where it is easier to focus only on the short-term, we are investing in our future and delivering growth in profits and dividends.

Our focus on improving efficiency across the business will allow us to continue to deliver strong financial results while making these investments.

We have a lot more to do but we are now a lot better positioned to do it.

With a market cap of 24 billion pounds, BT is valued at 11 times its 2012 earnings. After lifting its dividend today, BT's shares offer a trailing yield of 3.1%.

Of course, whether that valuation and the prospects for the telecom industry combine to make BT a buy is something only you can decide.

But if you already own shares in BT Group and are looking for alternative investment opportunities, this exclusive wealth report reviews five particularly attractive possibilities.

Indeed, all five opportunities offer a mix of robust prospects, illustrious histories and dependable dividends, and have just been declared by the Fool as "5 Shares You Can Retire On"!

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Related Tickers

10/26/2016 11:01 AM
BT $23.91 Up +0.05 +0.21%
BT Group CAPS Rating: *****
BT-A $386.75 Down -0.95 -0.25%
BT CAPS Rating: No stars