- Telecom giant Orange is still down roughly 25% on pre-COVID levels. Uncertainty in the early days of the pandemic led to a circa 30% dividend cut.
- Free cash flow has been pressured as the company invests heavily in ultrafast broadband across France and other European markets.
- The firm recently reinstated the pre-COVID annual dividend of €0.70 per share in respect of FY20.
- Free cash flow is set to rise in the coming years as heightened investment spending begins to wind down. This can support modest dividend growth.
- The stock trades for €9.70 per share. The implied 7.2% dividend yield, plus low single-digit growth, can lead to circa 10% per annum returns overall.
For further details see:
Orange: 7%-Plus Yield With Potential For Double-Digit Returns