CHL - China Mobile: Potential New Cold War Keeps This Dividend On Ice
Introduction
Following interest rates plunging to record low levels across virtually the entire globe, many investors are actively seeking sources of higher income. On the surface, China Mobile (CHL) seems to appear quite desirable with a near-6% dividend yield, whilst also sporting a very dominant market position. Although once looking under the surface, there are reasons to keep this investment off the table.
Dividend Coverage
When assessing dividend coverage, I prefer to forgo using earnings per share and use free cash flow instead, since dividends are paid from cash and not from “earnings”.