I’ve watched the BT Group (LSE: BT.A) share worth falling for years. I noticed it climb above £10 within the dot com bubble on the finish of 1999.

At round 110p nowadays, that’s a 90% fall. An incredible advert for long-term inventory market investing? Nope.

One thing comparable occurred with Vodafone Group (LSE: VOD). And the share worth loss this century is shut.

Lesson

We should be taught one thing from that, proper? Don’t purchase telecoms shares?

Nicely, perhaps not on the peak of a tech inventory bubble when valuations get foolish. However even with out that, they’ve each been poor performers prior to now decade.

Nonetheless, one factor has all the time nagged me. These two have been on good Dividend yields for years, though I’ve thought they shouldn’t.

For BT, huge debt and the massive pension fund deficit put me off. At Vodafone, it was lack of canopy by earnings, and a really feel that the agency wanted to vary.

Dividends

We’re seeing a refocus now. A part of it means the dividend will likely be sliced in half beginning in 2025.

For now, we’re nonetheless a forecast 11.2% yield this 12 months. And after the lower, 5.6% would nonetheless appear fairly good to me. Particularly if that’s as little as it’s prone to go.

BT, in the meantime, exhibits no signal of wanting to chop its dividend. And with a 7% ahead yield, there have to be a share worth that makes it a purchase. Mustn’t there?

And since February, BT shares have been gaining a bit.

Lengthy-term returns

Even when the BT share worth doesn’t transfer, and the dividend stays the identical, that 7% may nonetheless construct up a tidy sum.

Simply £200 a month, with a 7% annual return, may generate a pot of £102,000 in 20 years. So, neglect BT’s debt and don’t take into consideration how the corporate ought to change? Simply take the money and reinvest it?

If I’m listening to it proper, I believe that’s what the BT share worth uptick is likely to be telling me. And it is likely to be proper.

Forecasts

Each shares present good forecasts. At Vodafone, we see rising earnings within the subsequent few years. And a dividend that needs to be properly lined after the lower takes place.

These are most likely probably the most unsure forecasts of the 2, thoughts. And we’ll must see how the refocus goes.

At BT, we additionally see earnings progress. And the dividends needs to be near twice lined.

Which is healthier

Proper now, I’m drawn extra to BT. Its ahead price-to-earnings (P/E) ratio of solely seven is low. And it would even counsel the share worth has bottomed out.

I’ve recent hopes for Vodafone too. However I’m extra inclined to attend and see how 2024 pans out.

So, am I developing with a brand new technique? Shut up and take the dividends? I believe it would work. Then once more, to be honest, it is likely to be silly.

Vodafone’s restructure might be very dangerous. And BT’s dividend is definitely nonetheless beneath menace from all that debt. However it could a minimum of be a easy technique.