Vodafone Group (VOD) is increasing its "final" dividend (the second semi-annual dividend for 2013) by 7.0%, from 6.47 to 6.92 pence per ordinary share (news release). At the current exchange rate (£1 = $1.52), share conversion (1 ADS = 10 ordinary shares), and ADS charge ($0.02 per ADS), my 125 shares of VOD should provide me with a final dividend of about $129, to be paid sometime in August.
Vodafone also announced that the £2.1 billion dividend payment to be received in June 2013 from Verizon Wireless (45% of which is owned by Vodafone) will be "retained in the business," so there will be no special dividend to shareholders this year. In addition, the company "aims at least to maintain the ordinary dividend per share at current levels." Is this a hint that shareholders may not see much of a dividend increase next year?
The company's operating results continue to be dragged down by Europe and it is unclear when the situation there will improve. Verizon Wireless continues to do very well, but there is uncertainty about the regularity of future dividend payments and whether Verizon (VZ) will make a bid for Vodafone's stake (which has an estimated value of $90-100 billion with no premium factored in). I plan to continue holding VOD and wait to see what happens with the rumors swirling around Verizon Wireless.