Telefónica has chosen to lower its 2012 dividend to 1.5 euros per share compared to the 1.75 euros per share that was predicted. The decision is opportune and stems from a prudent analysis process: when the economic outlook darkens and estimations augur lower profits, one cannot dedicate one hundred percent of corporate earnings to shareholder dividends.
The telecom presided over by César Alierta, as the rest of the industry titans, has had to watch its business weaken in Spain, content itself with feeble credit markets and deal with competition and regulation in the telecom sector, which are both demanding that companies be prepared to make investments on behalf of growth especially now that there are some opportunities for it.
Telefónica has shown more than enough signs that it can ride out the crisis and even profit from it by diversifying and boosting growth outside of Spain, particularly in Latin America. And its dividend policy will still be attractive and the best on the Ibex.
