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Vodafone Group plc: one winter warmer I’d buy from the FTSE 100

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I am convinced that Vodafone Group (LSE: VOD) is a share that should warm the cockles of all share investors with winter just around the corner.

The telecoms titan is set to release latest trading details next week — half-year financials are slated for November 14 — and if the last release is anything to go by then, Vodafone could see it extend its recent share price upswing.

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Back in July it announced that organic service revenues rose 2.2% during April-June. At face value, this is hardly terrific, but dig a little closer and the numbers look pretty impressive.

Despite the impact of regulatory considerations in its core European marketplace, Vodafone still managed to grow organic service revenues 0.8% in the quarter (without these issues sales would have risen 1.8%). The mobile operator continues to pick up momentum in this region, organic revenues improving from 0.1% in the prior quarter, and turnover should keep on rising as economic conditions on the continent improve.

Moreover, the summer release also underlined the excellent earnings opportunities of its emerging markets. In quarter one, aggregated organic service revenues across Africa, the Middle East and Asia Pacific boomed 7.9%, speeding up from the 6.8% rise punched in the previous three months.

Picking up the pace

Whilst Vodafone still faces intense competition in its core markets, thanks to its multi-billion-pound organic investment scheme (and insatiable appetite for mergers and acquisitions) it remains in great shape to continue adding customer numbers for its mobile and broadband services.

So City analysts are predicting earnings growth of 6% and 21% in the years ending March 2018 and 2019 respectively, and while a forward P/E ratio of 28.7 times looks expensive on paper, I reckon this is a small price to pay for the Footsie giant’s growing might across the globe.

Besides, Vodafone’s massive dividend yields take the sting out of this monster multiple. A proposed 15.1 euro cent per share dividend in fiscal 2018 yields 6.1%, and the 15.3 cent payout anticipated for the next year yields 6.2%.

Screen star

ITV (LSE: ITV) is another FTSE 100 firm predicted to churn out brilliant dividends now and beyond.

Although current pressures in the advertising market are expected to prompt an 8% earnings decline in 2017, this shouldn’t prove a barrier to abundant dividend yields, and an anticipated 7.9p per share reward yields a mighty 5%.

With earnings expected to stage a modest 1% rebound next year too, the dividend is expected to step to 9.8p, meaning ITV’s yield moves to an even better 6.3%.

Look, while advertising budgets could remain under pressure beyond 2017 as the political and economic troubles gripping the UK likely worsen, I am convinced ITV is a great stock for long-term investors to snap up.

Acquisition activity across the globe at its ITV Studios arm  provides plenty of revenue opportunities in the years ahead (sales here grew 7% during January-June), as does the company’s growing expertise in so-called new media. Besides which, the long-term outlook for the ad market remains pretty favourable.

While ITV isn’t without its share of headaches, I reckon a forward P/E ratio of 10 times makes the broadcaster too cheap to miss.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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