The search for higher yields is driving the biggest rally in seven years for telephone stocks, as investors ignore some of the lowest profit forecasts in the MSCI World Index.
“I know they don’t have earnings growth, but I am not buying them for growth but for their very high, abnormal dividend,” said Jacob De Tusch-Lec, a London-based fund manager at Artemis, which oversees $16 billion. “If I can see KPN paying 3 percent on their bond and giving me a dividend yield of 6 percent, why would I buy the bond?”
Source: Business Week
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