Of course, one of the most bearish titles that there are at the moment are those that correspond to Telefónica. They have seen how in a few months the price of their shares has gone from almost 8 euros per share to being worth less than 5 euros. In other words, it has suffered a depreciation of more than 30% to the despair of its shareholders. Under a downtrend that had not been remembered for a long time. Where the selling pressure has been imposed with special clarity on the buyer. And what is worse, with a volume of recruitment that must be classified as quite acceptable.
At the moment, very few small and medium investors trust the national telecom par excellence. And therefore they prefer other options to make their savings profitable with greater guarantees of success in setting their prices. For example, in electricity companies that are exercising refuge values in the scenario of greater volatility in the equity markets. To the point that some analysts of the financial markets are of the opinion that the titles of the teleco can go up to the level of 5 euros per share from now on.
A scenario that certainly does not invite you to take positions in the value. If not, on the contrary, it is advisable to wait until the first signs of the formation of a soil can be given. From where it manages to overcome in the medium and long term and that can present a very attractive revaluation potential for the interests of small and medium investors. On the other hand, it hopes to buy its shares with more adjusted prices than those presented by the company at the moment. When a few years ago he was still testing the levels in the ten euros per share.
Telefónica: dividend increase
However, the positive side of this performance by Telefónica in the equity markets is that its dividend yield is now higher than before the summer. With an interest that offers around 7% and one of the highest of the values that make up the selective index of Spanish equities. Even ahead of the values of the electricity sector, which have traditionally led this ranking over the last decades. This is a curious effect that has generated the fall in the company's shares and in such a way that savers are its main beneficiaries.
Telefónica pays 0,40 euros as a dividend every year through a fixed charge, guaranteed to be divided into two installments of 0,20 euros each. In this way, a person who invests his savings at 5,80 euros per share will have a dividend estimated at 4.000 euros every year and after deducting taxes. That is, you will have a monthly income every year very close to 350 euros. Of course, well above what banking products and fixed income derivatives currently offer. That is, to form a portfolio of fixed income within the variable. Whatever happens in the equity markets.
Weighed down by debt and Latin America
In any case, the latest results of the company have not been entirely bad, but on the other hand, very badly received by the financial markets. Where, Telefónica closed the first half of the year with a profit of 1.787 million euros, which represents an improvement of 2,8% compared to the same period last year. It is evident that the good performance of the business in Spain, the United Kingdom and Germany compensates for the falls registered in Brazil and Argentina. But some of its business lines continue to create many doubts among small and medium investors.
While on the other hand, the true Achilles heel of the national telecom is its high debt that is very frowned upon by financial analysts. Among other reasons because it can weigh down your business accounts from the next few quarters. Where one of the solutions you have at hand to reduce it is to lower the dividend yield. And this is a fact that financial agents do not like, since if it were to occur, a new downward escalation would be generated in their prices. To the point that this is going to be one of the keys to the future of the telecommunications company in the coming years. And what is worse, with a volume of recruitment that must be classified as quite acceptable.
Soccer League Rights
Movistar has renewed for next season the broadcasting rights in Horecas (hotels, restaurants and cafeterias) of the soccer content of LaLiga Santander, the Champions League and the Europa League, so that customers of the premises that have Movistar + will be able to enjoy the most complete sports offer on television. But it is not clear that this operation is profitable for the interests of the telecom and it is even doubted that the contract can be renewed in the coming years. It is another of the factors that come to explain the sharp drop in prices in recent weeks or even months.
Of course, the broadcasting rights of football matches can play against the interests of this listed company. Until it reaches levels lower than those currently quoted. In this sense, it is preferable to wait for what happens with the emission rights happens to make a decision. Either to open positions or, on the contrary, to forget about the value for a very long period of time and not have more than one problem with the price of its shares. Although there are many financial intermediaries who think that their prices are very cheap at the moment. Or at least they are very well adjusted.
Discounts on your products
All this despite the fact that users of the telecommunications company will benefit from additional discounts of up to 150 euros in high-end smartphones, and they can finance all Apple Watch with six months of free multiSim without interest. In addition, BuyBack is the service through which the company will from now on buy customers their old device when they purchase a new one. A piece of news that certainly has not risen on the equity markets. If not, on the contrary, it has been neutral within a clear bearish context in the medium and short term.
In either case, bad times for investment loom in the coming years as a consequence of the possibility that its price could go to levels close to 5 euros per share. Beyond other considerations of a technical nature and perhaps also from the point of view of its fundamentals.
Leader in fiber optics
In Spain there are already more than six million homes that are using Telefónica's fiber optics to receive their connectivity services, which represents an increase of more than 24% compared to the same period of the previous year. This growth in the number of households that access its services through the Telefónica network is reflected in its optimization, since the use of the operator's fiber reached 27% of the total in June, a higher percentage in 3 points to the June 2018 figure.
In this sense, Telefónica has the largest fiber optic network to the home in Europe and continues to undertake an ambitious deployment plan with the aspiration of reaching comprehensive fiber coverage before 2025. As of today, the operator already has covered with fiber 70% of the national territory. As of June 30, the number of Real Estate Units passed through fiber reached 22,2 million, an increase of almost 10%. In relation to June of last year, two million new homes that have the network at their disposal. This represents more than 2 or 3 of the total of Real Estate Units.
With 68% of customers
Of the more than six million homes that use Telefónica's fiber, 4,15 million are Movistar customers, which represents 68% of those that use BAF, and the rest, 1,86 million, are wholesale customers who access to the network through another operator. Both groups of clients have experienced sustained growth in recent years. If we compare it with the previous year, as of June 2019, Movistar clients have grown more than 13% while wholesale clients have reached an increase of 61%.
Movistar, a pioneer in the deployment of fiber infrastructure, began to market it in 2008 with a download speed of 30 Mbps. Since that date, the evolution has been unstoppable, both in the number of homes passed with fiber, and in clients who have contracted services in that infrastructure and in network speed, reaching 600 Mbps symmetric this year.