A bumper €3.7 billion payout from its US joint venture could help Vodafone cement its position as the most generous dividend payer on the London Stock Exchange, analysts have suggested.
The UK telecommunications giant owns a 45% stake in America's largest mobile phone network Verizon Wireless, which began sharing profits this year. Verizon's first payment saw €8 billion shared by Vodafone and its majority owner Verizon Communications, a US broadband company.
This resulted in a €3.5 billion windfall for Vodafone, of which €2.5 billion was distributed to its shareholders via a €5 dividend in February. Broker Liberum Capital said the number could rise to €3.7 billion this financial year and to €5 billion by 2016.
If Vodafone ploughs 75% of the taking into its dividend, as expected, it could translate into a 15% rise in the dividend this financial year. Verizon Communications is due to announce its half-year results on July 19, a day before Vodafone.
Liberum analyst Lawrence Sugarman said: "We expect news shortly that the payment will be repeated at a higher level. Verizon has material scope to increase its dividend going forward, and crucially, because of the need to fund the Verizon group dividend, has a significant incentive to pay one."