April 24 (Bloomberg) -- TDC A/S rose the most among Copenhagen’s benchmark stocks today after Nordea Bank AB predicted Denmark’s biggest phone operator will be able to raise dividends as taxes and borrowing costs decline.
TDC gained as much as 2.2 percent, the most since April 2 and the biggest intraday jump on the Copenhagen 20 Index. The stock was trading up 0.7 percent at 44.64 kroner at 10:25 a.m. in the Danish capital, with trading volume at 18 percent of the three-month daily average.
The company, which said in February that revenue and profit will decline in 2013, will improve cash flows in coming years, analysts at Nordea said today in a report. The bank raised its recommendation on the Copenhagen-based phone company’s stock to buy from hold and lifted its share-price estimate by 8.1 percent to 50 kroner.
TDC’s cash flow “will be supported by a lower Danish corporate-tax rate and a refinancing of debts at lower interest rates, which gradually will increase dividend payments,” Nordea said.
The phone company lowered payout terms on Nov. 6, saying that it will pay about 90 percent of equity free cash flow after special items, compared with a previous ratio of 80 percent to 85 percent of cash before special items.
TDC has made two dividend payments each of 2.3 kroner a share since August 2012. The next dividend payment, scheduled for August this year, will decline to 1.85 kroner a share, according to dividend projections compiled by Bloomberg.
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