Seeking Alpha
Summary Vodafone is an attractive defensive investment with a high dividend yield and future dividend growth potential. After the divestment of its stake in Verizon Wireless, gta 4 Vodafone has strengthened its portfolio with selective investments in its major markets. Vodafone's strategy can put the company on a growth path and secure sustainable dividend growth. gta 4
In the current market environment, an investment in defensive stocks with a high, but sustainable dividend yield and the potential for future dividend growth is probably one of the wisest investment strategies. Some European stocks offer a promising perspective for investors seeking regular income from dividends, as well as dividend growth potential. One of these stocks gta 4 is Vodafone gta 4 ( VOD ).
The two dominating gta 4 subjects for Vodafone have been the sale of its stake in Verizon Wireless to Verizon Communications ( VZ ) and a possible offer from AT&T ( T ) to take over Vodafone itself. The dust has now settled and the sale, including the distribution of a large part of the proceeds to its shareholders by a combination of a special dividend and Verizon shares, has been completed. The speculation about an offer from AT&T also has calmed down after AT&T confirmed that it will make no such offer on Jan. 27 , so I think it makes sense to look at what lies ahead for the "new" Vodafone.
In my opinion, Vodafone is the most promising investment in the European Telecom sector for three reasons: Vodafone has strengthened its balance sheet and is now in much better financial shape than most other European telecommunication companies. Vodafone has a track record of growing its dividend since the first payment 15 years ago, and it is committed to continued dividend growth. Vodafone is managing its portfolio for growth and higher gta 4 profitability, and should benefit from a recovery of the European economy. The ongoing consolidation in the European telecom sector and Vodafone's strong presence in selected emerging markets should further contribute to profitable growth.
The other three large players among European telecommunication companies and Vodafone's competitors are Deutsche Telekom, Germany ( OTCPK:DTEGF ), Orange, France (the former France Telecom) ( ORAN ), and Telefonica, Spain ( TEF ). Financial Situation and Stock Price
Vodafone has sold its stake in Verizon Wireless for $130B, of which $84B were distributed to its shareholders. This means that Vodafone has kept a nice pile of cash to be used for investments and to increase financial flexibility. In its half-year presentation in November 2013 (Vodafone's fiscal year ends on March 31), Vodafone expects to reduce its net debt from £25.7B to £14.5B after completion of the German and U.S. transactions (the purchase of Kabel Deutschland and the Verizon Wireless sale). However, this assumption does not include the recently announced acquisition of Ono in Spain for £6B. Before the Verizon Wireless deal, Vodafone's debt to EBITDA gta 4 ratio of 2.03 in 2013 was already the lowest among its competitors (vs. 2.24 for Deutsche Telekom , 2.38 for Telefonica , and 2.43 for Orange ), and it can be estimated that it will be reduced below 1.50 if no additional larger investments are on the radar. The lower debt burden obviously translates to lower interest payments, leaving gta 4 more cash flow for dividends and also more flexibility to actively participate gta 4 in a possible consolidation of the Telecom industry in Europe if the necessity arises.
Vodafone gta 4 shares have shown significant outperformance in the past five years. The following chart speaks for itself, but, nevertheless, Vodafone is not overpriced in comparison gta 4 to its peers. It has maintained an attractive dividend yield as it has raised dividends and repurchased shares.
Vodafone ADRs are listed and traded on the Nasdaq stock market under the VOD symbol and one ADR represents 10 ordinary shares. Closing prices were $ 37.06 on May 13 per ADR or 219.85 pence per ordinary share on the London Stock Exchange. The ADRs reached a five-year high at the end of February 2014 when trading at $ 41, and then dropped gta 4 12% to $ 36 in April. The very recent news that AT&T could buy DirecTV ( DTV ) has not helped the stock either as it has eliminated further speculations that a possible AT&T/Vodafone deal could come back on the agenda in summer. I consider a stock price in the $35-$36 range attractive gta 4 to initiate positions in Vodafone, a scenario we might see when the company reports its FY 2013 (ended March 31, 2014) results on May 20. Q4 should be impacted gta 4 by still declining sales in Europe and negative exchange rate effects in the emerging markets. Dividend and Share Buyback
Telecom stocks have traditionally offered very attractive dividend yields for investors seeking regular income. This has also been true for the major European companies until a few years ago when declining profits and the increasin
Summary Vodafone is an attractive defensive investment with a high dividend yield and future dividend growth potential. After the divestment of its stake in Verizon Wireless, gta 4 Vodafone has strengthened its portfolio with selective investments in its major markets. Vodafone's strategy can put the company on a growth path and secure sustainable dividend growth. gta 4
In the current market environment, an investment in defensive stocks with a high, but sustainable dividend yield and the potential for future dividend growth is probably one of the wisest investment strategies. Some European stocks offer a promising perspective for investors seeking regular income from dividends, as well as dividend growth potential. One of these stocks gta 4 is Vodafone gta 4 ( VOD ).
The two dominating gta 4 subjects for Vodafone have been the sale of its stake in Verizon Wireless to Verizon Communications ( VZ ) and a possible offer from AT&T ( T ) to take over Vodafone itself. The dust has now settled and the sale, including the distribution of a large part of the proceeds to its shareholders by a combination of a special dividend and Verizon shares, has been completed. The speculation about an offer from AT&T also has calmed down after AT&T confirmed that it will make no such offer on Jan. 27 , so I think it makes sense to look at what lies ahead for the "new" Vodafone.
In my opinion, Vodafone is the most promising investment in the European Telecom sector for three reasons: Vodafone has strengthened its balance sheet and is now in much better financial shape than most other European telecommunication companies. Vodafone has a track record of growing its dividend since the first payment 15 years ago, and it is committed to continued dividend growth. Vodafone is managing its portfolio for growth and higher gta 4 profitability, and should benefit from a recovery of the European economy. The ongoing consolidation in the European telecom sector and Vodafone's strong presence in selected emerging markets should further contribute to profitable growth.
The other three large players among European telecommunication companies and Vodafone's competitors are Deutsche Telekom, Germany ( OTCPK:DTEGF ), Orange, France (the former France Telecom) ( ORAN ), and Telefonica, Spain ( TEF ). Financial Situation and Stock Price
Vodafone has sold its stake in Verizon Wireless for $130B, of which $84B were distributed to its shareholders. This means that Vodafone has kept a nice pile of cash to be used for investments and to increase financial flexibility. In its half-year presentation in November 2013 (Vodafone's fiscal year ends on March 31), Vodafone expects to reduce its net debt from £25.7B to £14.5B after completion of the German and U.S. transactions (the purchase of Kabel Deutschland and the Verizon Wireless sale). However, this assumption does not include the recently announced acquisition of Ono in Spain for £6B. Before the Verizon Wireless deal, Vodafone's debt to EBITDA gta 4 ratio of 2.03 in 2013 was already the lowest among its competitors (vs. 2.24 for Deutsche Telekom , 2.38 for Telefonica , and 2.43 for Orange ), and it can be estimated that it will be reduced below 1.50 if no additional larger investments are on the radar. The lower debt burden obviously translates to lower interest payments, leaving gta 4 more cash flow for dividends and also more flexibility to actively participate gta 4 in a possible consolidation of the Telecom industry in Europe if the necessity arises.
Vodafone gta 4 shares have shown significant outperformance in the past five years. The following chart speaks for itself, but, nevertheless, Vodafone is not overpriced in comparison gta 4 to its peers. It has maintained an attractive dividend yield as it has raised dividends and repurchased shares.
Vodafone ADRs are listed and traded on the Nasdaq stock market under the VOD symbol and one ADR represents 10 ordinary shares. Closing prices were $ 37.06 on May 13 per ADR or 219.85 pence per ordinary share on the London Stock Exchange. The ADRs reached a five-year high at the end of February 2014 when trading at $ 41, and then dropped gta 4 12% to $ 36 in April. The very recent news that AT&T could buy DirecTV ( DTV ) has not helped the stock either as it has eliminated further speculations that a possible AT&T/Vodafone deal could come back on the agenda in summer. I consider a stock price in the $35-$36 range attractive gta 4 to initiate positions in Vodafone, a scenario we might see when the company reports its FY 2013 (ended March 31, 2014) results on May 20. Q4 should be impacted gta 4 by still declining sales in Europe and negative exchange rate effects in the emerging markets. Dividend and Share Buyback
Telecom stocks have traditionally offered very attractive dividend yields for investors seeking regular income. This has also been true for the major European companies until a few years ago when declining profits and the increasin
No comments:
Post a Comment