Tuesday, February 23, 2010

Long Term View: Telecom NZ Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO.

The calculation of returns includes dividends and tax credits.

Lets have a look at Telecom New Zealand Ltd [TEL.NZ] this time. I have skipped to the end of the alphabet here because Telecom is in the news and it is bad news, again. When I started this series I was convinced that this company would be one of those that would show better returns than most would think given that its share price is currently around its 1992 IPO level. Lets see.

With NZ$5.95c in net dividends paid (see chart above & 1997, 1999, 2009 TEL Annual Reports ) (the reason why I thought the returns would be better than simply looking at the share price and ironically the reason why the company is struggling and getting so much bad publicity - too much paid in dividends and not enough investment back into the company) and another 33% of that figure gained for those eligible for associated tax credits, makes just over a 450% return (see chart below for share price percentage gain against the average of all NZX indexes) over the 18 year listing which gives an annual net return of around 25 %.

This is approximately 35% better than the return from the average of all NZX indexes.

Long Term View Series

Auckland International Airport
Air New Zealand
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hellaby Holdings Ltd
Mainfreight Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd

Telecom NZ @ Share Investor

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Download every available TEL Annual Report Free

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