A compelling profile
We believe Telcos offer a compelling profile of strong cash flows, solid balance
sheets and dividends that look amongst the most secure in the market. With free cash
flow yields of 10-11% pa and dividend yields of 6-7%, we believe the telco sector will
extend its recent outperformance into the beginning of 2009.
Key recommendations & forecasts
Reuters Year end Recom Price Target
price
EPS
1fcst
PE
1fcst
British Telecom BT.L Mar 2009 Hold £1.43 £1.20 0.21 6.7
Cable & Wireless* CW.L Mar 2009 Buy £1.57 £2.40 0.09 17.7
Deutsche Telekom DTEGn.DE Dec 2008 Hold