Scotiabank’s recent upgrade of T-Mobile reflects a confident outlook on the company’s growing appeal to income-focused investors. The telecom giant has made a significant strategic shift by initiating a regular dividend and enhancing shareholder return programs.
📌 In late 2023, T-Mobile introduced its first quarterly dividend of $0.65 per share, marking a new chapter in its capital return strategy. That dividend has since increased to $0.88 per share quarterly, or $3.52 annually, which gives the stock a forward yield of about 1.46%. The payout ratio is still low, around 30%, suggesting there’s ample room for future growth.
📌 This shift comes alongside a multibillion-dollar share buyback program that has seen T-Mobile return nearly $35 billion to shareholders. With free cash flow expected to reach up to $19 billion by 2027, the company appears well-positioned to maintain and even increase these shareholder-friendly initiatives.
📌 Beyond the numbers, T-Mobile continues to lead in 5G deployment and expand its presence in the broadband market. These strategic moves enhance revenue streams and help reinforce the sustainability of its dividend policy.
📌 Scotiabank’s revised price target of $277.50 reflects a positive long-term view rooted in the company’s operational execution and capital allocation discipline.