- Telefonica's scrip dividend options were crafted to induce shareholders to take the dividend declared in December, to be paid in January, in the form of stock rather than cash.
- But with a falling stock price, the value of the stock dividend has fallen to be roughly equal to the cash dividend.
- If Telefonica returns to paying a full cash dividend (as I expect in late 2021 or 2022) that may signal financial pressures are moderating, thereby bolstering TEF stock price.
For further details see:
Telefonica's Inducement To Shareholders To Accept A Stock Dividend May Be Losing Some Appeal