Vodacom Group's ROCE trend suggests a stable but unimpressive growth, and the company's high dividend payout may indicate a lack of reinvestment opportunities.

Vodacom Group's ROCE is 19%, lower than the industry average of 35%. The company's capital employed and returns have been stable for the last five years, indicating a lack of reinvestment and potential limited growth. Vodacom Group pays out 71% of its earnings as dividends, suggesting that shareholders are primarily interested in the dividend rather than long-term growth.

On July 10, 2025, shares of Ryder System, Inc. (R) rose by 3.05% to close at $176.01 per share, driven by the company's announcement of a substantial dividend hike. The dividend, which was approved by the board of directors, will see a 12% increase, raising the quarterly cash dividend to 91 cents per share ($3.64 annualized) from 81 cents ($3.24 annualized). This move is set to be paid out on September 19, 2025, to shareholders of record as of August 18, 2025 [1].

Ryder's latest dividend increase marks the first since July 2024 and underscores the company's confidence in its financial health despite the challenging macroeconomic backdrop, including ongoing tariffs. This hike is part of Ryder's 196th consecutive quarterly cash dividend payment, reflecting a commitment to shareholders that spans over four decades. The dividend hike is a strategic move to enhance shareholder returns, as stated by the company's chairman and CEO, who highlighted Ryder's ability to deliver annual dividends in line with its higher earnings profile.

Ryder's dividend yield (TTM) remains competitive, making it an attractive option for income-focused investors. The company has consistently rewarded shareholders through dividends and share buybacks. For instance, in 2024, Ryder returned $456 million to shareholders through share repurchases and dividends. This trend continued in the first quarter of 2025, with $202 million returned to shareholders through buybacks and dividends.

The dividend hike is not an isolated event within the transportation sector. Other notable companies, such as Delta Air Lines, Inc. (DAL) and FedEx Corporation (FDX), have also announced dividend hikes in 2025. Delta increased its quarterly dividend by 25%, while FedEx raised its dividend by 5.1%. These announcements reflect a broader trend of companies using dividends and share buybacks to reward shareholders, particularly in the challenging macroeconomic environment [1].

Vodacom Group, a telecommunications company, provides a contrasting example. While Vodacom Group's ROCE is 19%, lower than the industry average of 35%, its stable capital employed and returns indicate a lack of reinvestment and potential limited growth. Vodacom pays out 71% of its earnings as dividends, suggesting that shareholders are primarily interested in the dividend rather than long-term growth [2].

In conclusion, Ryder System, Inc.'s dividend hike is a significant move that underscores the company's commitment to shareholders and its confidence in its financial health. This strategy, combined with consistent dividend payments and share buybacks, positions Ryder as a solid investment option for income-focused investors.

References:
[1] https://www.tradingview.com/news/zacks:1ae07c36d094b:0-ryder-stock-rises-more-than-3-following-dividend-hike/
[2] Vodacom Group's ROCE is 19%, lower than the industry average of 35%. The company's capital employed and returns have been stable for the last five years, indicating a lack of reinvestment and potential limited growth. Vodacom Group pays out 71% of its earnings as dividends, suggesting that shareholders are primarily interested in the dividend rather than long-term growth.