How secure is Vodafone's dividend outlook?

DIVIDENDS

JO Hambro's Clive Beagles and Threadneedle's Simon Brazier have urged caution over Vodafone's dividend prospects after analysts suggested its payouts are unsustainable.

Vodafone is set to take over from Shell as the UK’s biggest dividend payer this year, accounting for over 3% of the FTSE 100’s total, but its growing dependence on a payout from its US joint venture Verizon has caused concern.  “We have taken our holding of Vodafone down quite a lot. It yields a slightly artificial 8% because of the Verizon special dividend, but effectively it is distributing all its annual profits in dividends. That really is our medium-term concern,” said Beagles (pictured), speaking to Hargreaves Lansdown TV. Beagles and co-manager James Lowen’s £1.2bn JOHCM UK Equ...