Bloomberg- Cesar Alierta, head of former Spanish telephone monopoly Telefonica SA, delivered higher returns in the past year than Mohamed El-Erian did managing Harvard University’s endowment. Nowhe’s shifting his strategy to keep the price rising.
Alierta may set plans to raise Telefonica’s 2009 dividend beyond its announced target of 1 euro per share, or 4.77 billion euros ($6.67 billion), at a meeting with investors next month in London, said David Wright, an analyst with JPMorgan Chase & Co. The company, based in Madrid, paid out 60 cents for 2006.
The move to plow more money into dividends marks a change for Alierta, after an $80 billion acquisition spree left Telefonica with more debt than any European telephone company. Deutsche Telekom AG and France Telecom SA, with slower sales growth, yield more than Telefonica’s 3.1 percent. A bigger payout would lift the shares above 22.20 euros by 2008, a 14 percent gain, said Alberto Espelosin, who helps manage $12 billion including Telefonica shares at Ibercaja Gestion SA in Zaragoza, Spain.
“I expect Telefonica to reiterate their 2009 profit and dividend forecasts, or maybe even improve them,” said Wing-Yen Choi, an analyst at Theodoor Gilissen in Amsterdam. “Telefonica is a good investment; it’s my top bet among European phone operators. The company’s presence in emerging markets provides better growth prospects.”
Telefonica shares have returned 52 percent including dividends in 12 months, more than 96 percent of 2,371 hedge funds tracked by Bloomberg. Alierta’s 32 percent gain in the 12 months ended June 30 beat the 23 percent increase at the $34.9 billion Harvard endowment El-Erian left this month to join Pacific Investment Management Co.
