3 Shares To Invest Your Vodafone Windfall In: Royal Dutch Shell Plc, Royal Bank of Scotland Group plc and Vodafone Group plc

Royal Dutch Shell Plc (LON:RDSB), Royal Bank of Scotland Group plc (LON:RBS) and Vodafone Group plc (LON:VOD) could all be destinations for the proceeds of the Verizon Wireless deal.

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Royal Dutch Shell

Like Vodafone, Royal Dutch Shell (LSE: RDSB)(NYSE: RDS-B.US) is one of the FTSE 100’s true dividend titans. In recent years, the two have been fighting for the right to call themselves the UK’s biggest cash dividend payer. Vodafone used payments from Verizon Wireless to take this title from Shell in 2012. Now that this unit is being sold, we can expect Shell to recapture its crown.

Shell has not issued a dividend cut since the Second World War. Last year, the company paid $1.76 of dividends, equating to a 5.2% yield at today’s price. This payout is expected to be increased by 8.1% this year. That puts the shares on a prospective yield for 2013 of 5.5%.

Shell trades on a 2013 P/E of 8.6, falling to 8.3 if 2014 forecasts are met.

RBS

While you may be perfectly happy to spend the cash from Vodafone, fund managers will have to invest it. If they are going to pick up shares shares in a single company, the sheer amount of cash dictates that they will have to find another big blue chip.

This could present the perfect opportunity for the government to begin selling down its stake in Royal Bank of Scotland (LSE: RBS)(NYSE: RBS.US).

RBS is profitable, expected to deliver earnings growth and trades at a significant discount to book value. This could be a rare opportunity for fund managers to buy a large stake in a business without driving up its share price.

Vodafone

Nope, that’s not a typo in the headline. Instead of shopping around for a new investment, shareholders might like to simply buy more Vodafone (LSE: VOD) stock.

Shareholders in Vodafone look set to receive cash and Verizon Communications shares worth a total of 112p per Vodafone share. In Monday’s announcement, Vodafone confirmed that it expects to increase its per share dividend for 2014 by 8% and to continue increasing that payout.

This suggests that at today’s price, Vodafone will remain a high-yielding share.

Alongside its established European operations, Vodafone still offers great exposure to India, which has the potential to be a huge market for the industry.

If you are looking to add growth to your share portfolio, check out The Motley Fool’s analyst research report “The Motley Fool’s Top Growth Share Today” . This analysis is available entirely free of charge and will be delivered to your inbox immediately. Just click here to start reading today.

> David owns shares in Royal Bank of Scotland but none of the other companies mentioned. The Motley Fool has recommended shares in Vodafone.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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