Investors should reward, not penalise telcos that shift from yield to growth
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MAINBOARD-LISTED telco StarHub has long been viewed as a yield stock, thanks to its generous dividend payouts in the past. But this may not be the best strategy for the company in the current environment, and the market ought to recognise that.
Between 2011 and 2017, the company paid out S$0.20 a share in dividends annually - giving the stock a yield of between 4.5 and 7.5 per cent in those years.
In the face of technological disruption and other headwinds, however, StarHub has not been able to afford such generous dividends for some time. And its valuation has declined as a result.
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