BT Group Plc
🇬🇧 BT-A.LSE · London · GB0030913577
Telecom
GBX 201.55 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
19.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 201.55 ÷ 10.58 = 19.1
TTM period through: 2025-03-31
Forward P/E (estimated): 10.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 18.3
Yield (Fwd)
3.97%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 4.12%
Div. Growth (5Y CAGR)
-12.4%
Growth Streak
4 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
2.8x
Latest quarter: 11.2x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-03-31
Latest quarter (2025-03-31): 11.2x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
75.6%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 74.8%
Cash Flow Payout (TTM): 11.3%
FCF Coverage (TTM): 2.60x
ROE
8.5%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
5.3x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
BT Group is the UK's leading telecommunications provider, offering an attractive 4.1% yield heavily covered by operating cash flows. However, the company faces severe structural headwinds, including a massive £3.7 billion pension deficit, heavy debt burdens, and execution risks regarding its legacy analogue switch-off, making it a poor fit for conservative dividend growth strategies. Not recommended for new positions, as these permanent structural burdens outweigh the optically cheap valuation.
Sector Context
BT Group operates as the UK's dominant telecommunications provider, offering broadband, mobile (EE), and enterprise network services. In the telecom sector, while revenues from essential connectivity are highly predictable, the enormous capital expenditure required for generational network upgrades (like full-fibre and 5G) combined with heavy regulatory oversight often restricts long-term free cash flow growth and pricing power.
📊 Strategy Analysis
- • Dividend yield of 4.12% is exceptionally well-covered by free cash flow, with a cash flow payout ratio of only 11.27% (FCF coverage of 2.60x).
- • Trading at an attractive Forward P/E of 10.70 and EV/EBITDA of 5.32, suggesting the stock is priced cheaply relative to its future earnings and operating cash flow.
- • Operates as an essential service provider with a massive infrastructure moat through its Openreach division, which continues to expand its full-fibre network footprint.
⚠ What to Watch
- • Massive structural pension deficit of £3.7 billion mandates a severe £600 million annual cash drain through 2030, heavily restricting capital allocation and dividend growth potential.
- • Elevated structural net debt of £20.0 billion (Net Debt/EBITDA of 2.82x), compounded by the capital-intensive Fibre-to-the-Premises (FTTP) rollout and high interest rate environment.
- • History of severe, unpredictable dividend cuts (66% in 2018, 100% in 2021) and a 5-year EPS CAGR of -6.2% undermine its reliability for a conservative long-term income strategy.
- • Strict Ofcom regulatory oversight, including recently extended wholesale price caps on broadband speeds, structurally limits BT's pricing power and margin expansion.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-06-06
Disclaimer: This information is for educational purposes only. Not financial advice.