The Motley Fool

Is It Time To Sell Vodafone Group plc?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Vodafone’s price progress

In the three years between the start of 2010 and the end of 2012, shares in Vodafone (LSE: VOD)(NASDAQ: VOD.US) traded between 137p and 190p. For much of that time, the normal trading range for the stock was much narrower, typically trading between 165p and 180p.

2013 has seen a dramatic change. Beginning the year at 155p, the shares have risen consistently. Earlier this week they traded as high as 231p.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

A series of events has led investors to dramatically re-appraise the value of Vodafone shares for the better. The trouble is, the most optimistic scenario for the shares has already happened. This leaves me wondering whether the shares are still worth owning.

Why the big rises?

Sentiment toward Vodafone changed when the group began receiving huge dividends from its US joint venture Verizon Wireless. Despite the fact that these payments were not guaranteed, some investors were convinced that the cashflows would continue.

This was followed by noises from Vodafone’s partner in Verizon Wireless, stating that they would like to buy out Vodafone’s stake.

In August, Vodafone announced that it was in discussions to sell. This pushed the shares through their previous 190p barrier to close at 206p. When the deal was confirmed, the shares hit 213p.

Life after Verizon Wireless

The deal will see around 112p per share returned to Vodafone shareholders, likely in the first quarter of 2014. The company has also pledged to declare an 11p dividend for the year and that this payout will be increased in the future.

Assuming that the share price will lose 112p following this one-off payment, that will leave a company with a high quality earnings stream offering an 11p dividend.

If we reduce the current share price by 112p and apply an 11p dividend to what remains, that suggests that Vodafone shares offer a forward yield of 9.3%.


With mobile computing on the rise globally, there is a great opportunity for Vodafone to establish strong, new income streams in developing markets. On the other hand, trading in its mature European markets has been subdued and the telecom regulators apparently hostile.

All this considered, I believe that there remains a case for Vodafone shares to trade around 25% higher than they do today. The shares remain some way off being overpriced.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

> David does not own shares in any of the companies mentioned.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.