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Spark New Zealand Limited
Communication Services · Telecom Services
Updated just now
$1.79
MARKET CAP
$3.38B
P/E RATIO
6.8
DIV. YIELD
8.9%
FRANKING
—
Spark New Zealand Limited, together with its subsidiaries, operates as a telecommunications company in New Zealand. It operates through Cloud, IT Services Management, and Other Connectivity segments.
View full descriptionThe Warsi Rating combines two proven approaches: value investing principles and dividend strategy. A stock must score 70+ on both to be rated Solid or higher.
$7.79
Discounted cash flow estimate
$3.57
For 6% dividend yield
Business quality and balance-sheet durability.
Profit generated per $1 of shareholder investment
Annual dividends as percentage of stock price
Spark New Zealand Limited, together with its subsidiaries, operates as a telecommunications company in New Zealand. It operates through Cloud, IT Services Management, and Other Connectivity segments. The company offers telecommunications, information technology, and other digital products and services, including mobile services; broadband services; voice services; other connectivity; cloud services; IT services management; procurement and partner services; and business connectivity services. It also provides fixed modems and mobile handsets; installation or set-up services; network infrastructure; IT infrastructure build and maintenance services; distribution and supply chain services; and wholesale and outsourced telecommunications services.
In addition, the company is involved in rental of equipment; data analytics business; finance activities; and insurance activities. It serves individuals, households, small businesses, governments, and large enterprises. The company was formerly known as Telecom Corporation of New Zealand Limited and changed its name to Spark New Zealand Limited in August 2014. Spark New Zealand Limited was incorporated in 1987 and is based in Auckland, New Zealand.
Who owns the company's shares and how much leadership has at stake
Management's wealth moves with yours
A handful of professional investors are watching
Shares freely traded on the ASX by individual investors like you
Insiders hold 8.1% and institutions hold 19.4%. Look for higher insider ownership as a sign that leadership believes in the long-term value of the business.
Current Snapshot
Insider %
8.1%
Institutional %
19.4%
Float %
72.5%
Why It Matters
Ownership mix affects governance incentives, liquidity, and share-price behaviour under large portfolio rebalancing flows.
Formula
Public Float (%) = 100 - Insider Ownership (%) - Institutional Ownership (%)Method
Use reported ownership percentages, convert to percentage terms, and compute remaining public float as the residual.
Worked Example
If insiders own 8.1% and institutions own 19.4%, public float is 72.5%.
How to Interpret
Higher insider ownership can improve alignment of incentives, while dominant institutional concentration can amplify short-term price moves.
Insiders hold 8.1% and institutions hold 19.4%. Look for higher insider ownership as a sign that leadership believes in the long-term value of the business.
Sources
Value analysis may be affected by missing data.
Market data sourced from third-party financial data providers. Analysis generated using Warsi Criteria — proprietary scoring algorithms for value investing and dividend income analysis. Not financial advice. Learn how we analyse stocks →
Strong 29.0% average with no year below 12%. Consistent performance signals durable competitive advantage.
Current Snapshot
10Y Avg
29.0%
Threshold
12.0%
Worst Year
17.1%
Why It Matters
ROE shows how effectively management turns shareholder capital into profit. High and stable ROE can signal pricing power, cost discipline, or both.
Formula
Net Income / Shareholders' Equity x 100Method
Use the 10-year average ROE and review the weakest year to check whether returns stayed resilient across cycles.
Worked Example
This company's 10-year average ROE is 29.0%, meaning each $1 of shareholder equity generates $0.29 in annual profit. The threshold is 12%, and the worst single year was 17.1%.
How to Interpret
Higher and steadier ROE generally supports stronger long-term compounding. Large drawdowns in weak years can point to fragility.
At 29.0% ROE, every $1 retained by this company generates $0.29 in annual profit. This compounding power drives long-term wealth - and for dividend investors, it typically means sustainable dividend growth without needing debt.
Sources
Real cash left after running the business
Positive cash generation. Company produces real cash after capital expenditures - can fund dividends, buybacks, or growth.
Current Snapshot
Current FCF
$669M
Pass Rule
> $0
Status
Positive
Why It Matters
Free cash flow is the cash available after core operating and capital needs. It is central to dividend capacity.
Formula
Operating Cash Flow - Capital ExpendituresMethod
Review whether free cash flow is consistently positive and whether it is sufficient relative to dividends and debt needs.
Worked Example
This company generated $669M in free cash flow — cash left after operating costs and capital expenditure. Positive FCF means dividends are funded by real cash generation.
How to Interpret
Persistently negative free cash flow can force reliance on borrowing or equity issuance to maintain payouts.
Positive cash flow means dividends are funded by actual money, not accounting profits. As Buffett says, "Cash is fact, profit is opinion." Your income is backed by real cash generation.
Sources
How much the company owes vs. what it owns
Debt-to-equity of 1.15 is 1.2x over Buffett's limit. High leverage increases risk during downturns.
Current Snapshot
Current D/E
1.15x
Industry Limit
1.00x
Headroom
-0.15x
Why It Matters
Debt-to-equity shows balance-sheet risk. Lower leverage usually means more flexibility when earnings soften.
Formula
Total Debt / Shareholders' EquityMethod
Compare current D/E against the industry threshold used in the scoring framework, then assess remaining headroom.
Worked Example
This company's D/E is 1.15, meaning it carries 115 cents of debt for every $1 of equity. The telecommunications limit is 1.00, leaving it 0.15 over the limit.
How to Interpret
Lower values generally imply lower refinancing pressure and lower dividend stress in downturns.
High debt means interest payments come before dividends. During recessions, heavily indebted companies often cut dividends first to preserve cash. This adds risk to your income stream.
Sources
Price versus estimated intrinsic value and required return thresholds.
What percentage of the stock price comes back as earnings each year
Excellent value. 14.8% earnings yield significantly exceeds the 7.0% required return.
Current Snapshot
Current Yield
14.8%
Required Yield
7.0%
Spread
+7.7pp
Why It Matters
Earnings yield reframes valuation as return on price paid. It helps compare equity earnings power against lower-risk alternatives.
Formula
(Earnings per Share / Stock Price) x 100Method
Calculate current earnings yield, then compare it to the required yield for the stock's industry setting.
Worked Example
With EPS of $0.26 and a share price of $1.79, earnings yield is 14.8%. The required yield for this industry is 7.0% (based on 4.5% government bond rate plus a risk premium).
How to Interpret
A yield above the required level suggests better valuation support; below it indicates thinner compensation for equity risk.
Strong earnings yield means you're well-compensated for owning shares instead of buying safe bonds. The business is priced to deliver solid returns.
Sources
How current price compares with estimated intrinsic value
Years of earnings needed to retire all long-term debt
Manageable debt. Could pay off long-term debt in 2.5 years — comfortably within the 6-year threshold.
Current Snapshot
Payoff Years
2.5yr
Target Years
6yr
Gap
+3.5yr
Why It Matters
Debt payoff years converts leverage into an intuitive time measure, making debt burden easier to compare across stocks.
Formula
Long-Term Debt / Average Net Income (3yr)Method
Use current long-term debt and the 3-year average net income to smooth one-off profit noise.
Worked Example
With $904M in long-term debt and $358M in average annual earnings (3yr), it would take 2.5 years of earnings to pay off all debt. The telecommunications threshold is 6 years.
How to Interpret
Lower values generally indicate stronger debt capacity. Very high values can constrain dividend resilience.
Debt is comfortably serviceable from earnings. This means interest payments won't crowd out dividends, even during moderate downturns.
Sources
Percentage of revenue that becomes profit after all expenses
How efficiently the company turns money into profit
Consistency of profits over time
How much earnings are consumed by capital expenditure
Is the business growing — and is debt being managed responsibly?
Revenue and debt both stable — a mature business with steady fundamentals. Dividend sustainability depends on maintaining this equilibrium.
Current Snapshot
Revenue Change
-6.1%
Debt Change
+3.9%
Trend State
Mixed
Why It Matters
Revenue trend shows whether the business is expanding or contracting. Debt trend adds context on whether growth is being funded conservatively.
Formula
Revenue Change (%) = (Latest Revenue - Earliest Revenue) / |Earliest Revenue| x 100; Debt Change (%) = (Latest Debt - Earliest Debt) / |Earliest Debt| x 100Method
Map annual revenue history and, where relevant, annual debt history. For financial companies, debt is excluded because deposits and reserves distort this signal.
Worked Example
Revenue changed by -6.1% across the displayed period, while debt changed by +3.9%.
How to Interpret
Rising revenue with stable or falling debt is typically stronger than rising revenue funded by rapidly rising leverage.
Revenue and debt both stable — a mature business with steady fundamentals. Dividend sustainability depends on maintaining this equilibrium.
Sources
11.95% yield significantly exceeds Barsi's 6% minimum. Based on 6-year average, not one-time spikes.
Current Snapshot
6Y Avg Yield
11.9%
6% Requirement
6.0%
Gross Yield
N/A
Why It Matters
Yield translates dividend income into a percentage of the price paid, which is central to income-first screening.
Formula
Annual Dividends per Share / Stock Price x 100Method
Use the 6-year average annual dividend for consistency and compare the result with the 6% framework requirement.
Worked Example
With a 6-year average annual dividend of $0.21 and a share price of $1.79, the Barsi yield is 11.9%. The minimum requirement is 6%.
How to Interpret
Higher sustainable yield improves upfront income, but unusually high yields may reflect elevated risk or weak coverage.
Very high yields can signal trouble — the stock price may have dropped because the market expects a dividend cut. Verify the payout ratio is sustainable and the company can maintain this level of distributions before relying on this income.
Sources
Track record of consistent dividend payments
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| ~18 Sept 2026Est | ~7 Oct 2026 | ~$0.09 | 0% | ~$0.09 | $0.00 |
| ~22 Mar 2027Est | ~16 Apr 2027 | ~$0.12 | 0% | ~$0.12 | $0.00 |
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 19 Mar 2026Interim | 16 Apr 2026 | $0.06 | 0% | $0.06 | $0.00 |
| 9 Sept 2025Final | 7 Oct 2025 | $0.11 | 0% | $0.11 | $0.00 |
| 20 Mar 2025Interim | 17 Apr 2025 | $0.11 | 0% | $0.11 | $0.00 |
| 12 Sept 2024Final | 10 Oct 2024 | $0.13 | 0% | $0.13 | $0.00 |
| 21 Mar 2024Interim | 18 Apr 2024 | $0.12 | 0% | $0.12 | $0.00 |
| 14 Sept 2023Final | 12 Oct 2023 | $0.12 | 0% | $0.12 | $0.00 |
| 16 Mar 2023Interim | 13 Apr 2023 | $0.13 | 0% | $0.13 | $0.00 |
| 15 Sept 2022Final | 13 Oct 2022 | $0.11 | 0% | $0.11 | $0.00 |
| 24 Mar 2022Interim | 21 Apr 2022 | $0.14 | 0% | $0.14 | $0.00 |
| 16 Sept 2021Final | 14 Oct 2021 | $0.12 | 0% | $0.12 | $0.00 |
Excellent track record. 11 years of consistent dividends through multiple market cycles.
Current Snapshot
History
11yr
Predictability
Variable
Payout Health
High risk
Why It Matters
Payment consistency is a direct test of dividend reliability. Large cuts or skips often appear before confidence recovers.
Formula
Consecutive Years = count of years with dividend payments and no disqualifying skip/cut eventsMethod
Require at least 6 years of history, then check for skipped years and large cuts, allowing approved systemic-event exceptions.
Worked Example
This company has 11 years of dividend history (2016–2026). No suspensions detected — 11 consecutive years of payments. Predictability: Variable. Payout health: High risk. The minimum requirement is 6 years.
How to Interpret
Longer uninterrupted records generally signal stronger income reliability than high yield alone.
A 11-year track record through multiple economic cycles gives confidence your income will continue. This company has proven it prioritises shareholder returns.
Sources
Highest price to lock in 6% yield
Priced well below ceiling. 50% below means you're locking in well over 6% yield.
Current Snapshot
Current Price
$1.79
Max Buy Price
$3.57
Delta
+49.9%
Why It Matters
The price ceiling links valuation discipline to income targets by defining the price that aligns with a 6% yield target.
Formula
6-Year Average Annual Dividend / 0.06Method
Use the 6-year average dividend (not one year) and divide by 0.06 to estimate the maximum entry price for target yield.
Worked Example
With a current price of $1.79 and a ceiling of $3.57, the entry is 49.9% below the ceiling.
How to Interpret
Prices below the ceiling imply a historical yield above 6%; prices above it imply a lower historical yield at entry.
Buying this far below the ceiling locks in a yield well above 6% based on proven historical dividends. Your income starts strong from day one.
Sources
Industry category of the business
Telecom is an essential service sector with stable, predictable cash flows - ideal for dividend investing.
Current Snapshot
Industry
Telecom Services
BESST Match
Yes
Score Impact
+3 points
Why It Matters
Sector classification helps contextualise risk and demand durability, which can materially affect dividend stability.
Formula
BESST Match = Sector in {Banks, Energy, Sanitation, Insurance, Telecom}Method
Match company sector or industry against BESST categories. A match adds scoring support but does not replace core dividend checks.
Worked Example
This company operates in Telecom Services (Communication Services sector). It matches the Telecom category — an essential service sector with stable demand, earning a +3 point scoring advantage.
How to Interpret
BESST alignment is a positive context signal. Non-BESST stocks can still qualify with strong yield and dividend consistency.
Essential services maintain demand regardless of economic conditions - people always need electricity, banking, and telecommunications. Your income is protected by inelastic demand.
Sources
How much of a company's earnings are paid out as dividends
A 77% payout means the company distributes most of its earnings as dividends — more income per share now, but less room for growth. Around 67% is often considered “normal” for established companies. This level feeds directly into the price ceiling calculation.
Current Snapshot
Latest Ratio
76.6%
Healthy Range
30%-75%
Zone
Elevated
Why It Matters
Payout ratio links dividends to earnings capacity and helps evaluate whether current distributions are likely to remain supportable.
Formula
Payout Ratio (%) = (Annual Dividend per Share / Earnings per Share) x 100Method
Calculate year-by-year payout ratios where EPS is positive, classify each year by sustainability zone, and compare with the current TTM ratio.
Worked Example
$0.06 dividend / $0.26 EPS equals 23.5% payout ratio.
How to Interpret
Ratios in the middle range are usually more sustainable than very high ratios. Values above 100% indicate dividends exceeded earnings in that period.
A 77% payout means the company distributes most of its earnings as dividends — more income per share now, but less room for growth. Around 67% is often considered “normal” for established companies. This level feeds directly into the price ceiling calculation.
Sources
Exceptional discount: 67% BELOW the fair-value threshold (includes 30% margin of safety).
Current Snapshot
Current Margin
77.0%
Industry Threshold
30%
Status
67% Undervalued
Why It Matters
Margin of safety provides a valuation buffer against modelling uncertainty and adverse business outcomes.
Formula
(Estimated Intrinsic Value per Share - Current Price) / Estimated Intrinsic Value per Share x 100Method
Estimate intrinsic value using a two-stage DCF (10-year projection plus terminal value), then compare with current price.
Worked Example
For this stock now: intrinsic value is $7.79 per share, current price is $1.79, and margin of safety is 77.0%.
How to Interpret
Positive margin indicates price below modelled value; negative margin indicates price above modelled value. Compare against the industry's required buffer.
The market price sits far below your required entry threshold, providing a substantial valuation buffer if assumptions prove optimistic.
Sources
13.7% net margin meets the 10% threshold for this sector.
Current Snapshot
Current Margin
13.7%
Threshold
10.0%
Relative Position
+3.7%
Why It Matters
Net income margin shows how much profit the business keeps from each dollar of revenue after all costs.
Formula
Net Income / Total Revenue x 100Method
Compare current margin with the industry-specific threshold to avoid cross-sector distortions.
Worked Example
This company's net income margin is 13.7% — it keeps 14 cents of every revenue dollar as profit after all expenses. The telecommunications threshold is 10%, putting it 3.7% above the requirement.
How to Interpret
Margins that are both strong and stable can indicate competitive strength; persistent weakness may limit reinvestment and payout capacity.
Adequate profitability for this sector. The business converts enough revenue into profit to support dividend payments and moderate growth.
Sources
10.7% ROIC clears the 10.0% threshold, but the spread over the 8.0% cost of capital is narrow. A small decline could eliminate the value-creation margin.
Current Snapshot
5Y Avg
10.7%
Threshold
10.0%
WACC Delta
+2.7pp
Why It Matters
ROIC measures capital efficiency. Businesses that repeatedly earn above their funding cost can compound value more effectively.
Formula
After-Tax Operating Profit / Invested Capital x 100Method
Use the 5-year average ROIC and compare it with industry WACC plus the required spread in this framework.
Worked Example
This company's 5-year average ROIC is 10.7%, with a cost of capital (WACC) of 8.0%. The +2.7pp spread above WACC suggests it creates value on each dollar invested.
How to Interpret
A healthy spread above WACC suggests value creation; a narrow or negative spread points to weaker capital efficiency.
Returns exceed capital costs but the margin is thin. Monitor for consistency — if ROIC dips or borrowing costs rise, this company could shift from value creator to value destroyer.
Sources
11/4 positive EPS years. Limited data - full evaluation requires 8+ years. Monitor closely for consistency.
Current Snapshot
Positive Years
11/4
Allowed Losses
0 (limited)
EPS CAGR
3.2%
Why It Matters
Consistency in EPS helps distinguish resilient earnings power from one-off performance spikes.
Formula
Positive EPS Years / Available EPS YearsMethod
For 8+ years of data, apply industry-specific loss tolerance. For limited data, every available year must be positive.
Worked Example
This company reported positive earnings in 11 of the last 4 years. With only 4 years of data, every year must be positive. EPS growth rate (CAGR) is 3.2%.
How to Interpret
Fewer loss years and stronger EPS continuity generally improve confidence in future dividend and valuation assumptions.
So far so good, but limited history means we haven't seen how this company handles a full economic cycle. Monitor closely for continued consistency.
Sources
CapEx consumes 85% of cumulative earnings — above the 75% threshold. Expected for this capital-intensive sector.
Current Snapshot
10Y CapEx Intensity
85%
Threshold
75%
Buffer
-10%
Why It Matters
CapEx intensity estimates how much of earnings must be reinvested just to sustain operations.
Formula
Cumulative CapEx (10yr) / Cumulative Net Income (10yr) x 100Method
Aggregate 10-year CapEx and net income, then compare the ratio with the sector threshold in the framework.
Worked Example
Over 10 years, 85% of this company's cumulative earnings were consumed by capital expenditure. The telecommunications threshold is 75%, leaving a buffer of -10% (over threshold).
How to Interpret
Lower ratios usually indicate better cash conversion. Higher ratios can reduce room for dividends and buybacks.
High capital intensity means most earnings go back into maintaining the business rather than rewarding shareholders. This is typical for this sector but limits dividend growth potential.
Sources
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