Nippon Telegraph & Telephone Corp. : NTTYY-US: Dividend Analysis : September 28th, 2017 (record date) : By the numbers : November 20, 2017

Our analysis is based on comparing Nippon Telegraph & Telephone Corp. with the following peers – BT Group PLC Sponsored ADR, KT Corporation Sponsored ADR, PLDT, Inc Sponsored ADR, Chunghwa Telecom Co., Ltd Sponsored ADR, Orange SA Sponsored ADR, Telstra Corporation Limited Sponsored ADR, Deutsche Telekom AG Sponsored ADR and Internet Initiative Japan Inc. Sponsored ADR (BT-US, KT-US, PHI-US, CHT-US, ORAN-US, TLSYY-US, DTEGY-US and IIJI-US).

Nippon Telegraph & Telephone Corp.’s dividend yield is 1.95 percent and its dividend payout is percent. This compares to a peer average dividend yield of 3.21 percent and a payout level of 95.06 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 100 out of a possible score of 100 looks sustainable.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Dividends paid during each of the last five years were consistently of high quality.
  • The ending cash balance, with a dividend coverage of 4.27x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to June 30, 2017), NTTYY-US paid a high quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 12.08x), investing cash flow (coverage of -9.78x), issuance cash flow (coverage of -0.92x) and twelve-month prior cash (coverage of 4.02x), for a total dividend coverage of 5.27x.

NTTYY-US’s issuance cash flow includes outflows from net debt repayment (coverage of -0.66x) and net share buybacks (coverage of -0.66x). Thus, the total coverage including share buybacks is 5.93x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.

Dividend History

Item 2013-03-31 2014-03-31 2015-03-31 2016-03-31 2017-03-31 Latest
Dividend Yield (%) 4.3 3.07 2.78 1.84 2.65 1.95
Dividend Payout (%) 35 31.8 38.56 27.13 N/A N/A

A complete list of metrics and analysis is available on the company page.

Company Profile

Nippon Telegraph & Telephone Corp. is a holding company which engages in the telecommunication services. It operates through the following segments: Regional Communications Business, Long-Distance and International Communications Business, Mobile Communications Business, Data Communications Business, and Others. The Regional Communications Business segment offers domestic intra-prefectural communication services such as fixed voice-related, internet protocol, and packet communications services; and sells telecommunications equipment. The Long Distance and International Communications Business segment deals with the domestic intra-prefectural and international communications and system integration services. The Mobile Communications Business segment provides mobile voice-related, IP, and packet communications services; and sells telecommunications equipment. The Data Communications Business segment includes system integration and network system services. The Others segment involves in the real estate, finance, engineering, system integration and data processing, and development of technologies and shared operations. The company was founded on August 1, 1952 and is headquartered in Tokyo, Japan.

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