The Idiot Index

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Sector
Capital ExtractionApplied to wireless, broadband, and integrated communications carriers. COGS captures network cost of services; OpEx is dominated by SG&A and depreciation on enormous capital plants. Markup ratios understate the picture because the capital base isn't in COGS — Operational Markup…
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Capital Extraction in Telecom · FY 2023

6 of 6 companies · highest first
  1. 1
    CHTRCharter
    332% of net profit returned to shareholders — funded beyond current-year earnings
    sector median 0.7052Top 8%
    3.3156
    × buybacks+dividends / net income
  2. 2
    LUMNLumen
    103% of net profit returned to shareholders — funded beyond current-year earnings
    sector median 0.7052Top 25%
    1.0266
    × buybacks+dividends / net income
  3. 3
    TAT&T
    76% of net profit returned to shareholders, 24% reinvested
    sector median 0.7052Median range
    0.7604
    × buybacks+dividends / net income
  4. 4
    CMCSAComcast
    65% of net profit returned to shareholders, 35% reinvested
    sector median 0.7052Median range
    0.6500
    × buybacks+dividends / net income
  5. 5
    VZVerizon
    47% of net profit returned to shareholders, 53% reinvested
    sector median 0.7052Bottom 25%
    0.4734
    × buybacks+dividends / net income
  6. 6
    TMUST-Mobile
    0% of net profit returned to shareholders, 100% reinvested
    sector median 0.7052Bottom 8%
    0.0000
    × buybacks+dividends / net income

What this measures

Full methodology →

How much of net profit goes to shareholders rather than back into the business.

Ratio
Capital Extraction
Sector
Telecom
Methodology version
v1.0.0
Formula
(Buybacks + Dividends) / NetIncome
Sector context

Applied to wireless, broadband, and integrated communications carriers. COGS captures network cost of services; OpEx is dominated by SG&A and depreciation on enormous capital plants. Markup ratios understate the picture because the capital base isn't in COGS — Operational Markup is the more honest gross indicator. Shareholder Extraction is structurally high in this sector because mature carriers run large dividends.

What share of after-tax profit is returned to shareholders rather than reinvested. Universal across sectors — works for banks, insurers, REITs, and utilities where the Shareholder Extraction ratio (which divides by R&D) is undefined. A value of 1.0 means 100% of net income flows back out to shareholders; above 1.0 means the company is funding shareholder returns from sources beyond current-year earnings (debt, retained cash, asset sales).

Source data: PaymentsForRepurchaseOfCommonStock, PaymentsOfDividends, NetIncomeLoss (us-gaap) or ProfitLoss (ifrs-full).