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2 FTSE 100 stalwarts I think are market crash opportunities

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The FTSE 100 crashed due to the Covid-19 pandemic. Nearly 25% of its value was wiped off. This has thrown up some market crash opportunities.

Two stocks that I feel fall into the market crash opportunities category are Vodafone Group (LSE:VOD) and BT Group (LSE:BT.A). These FTSE 100 stalwarts are well known players in the telecommunications industry.

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FTSE 100 winner

Vodafone sits firmly in my list of winners for income-seeking investors. It provides telecoms services to over 400m people in over 25 countries. Telecoms services will not be dwindling during this downturn. In fact, the opposite will happen as millions of people need to use their devices to work, shop, and socialise virtually.

Last week Vodafone released its full-year results, which showed the company is heading in the right direction. Key takeaways for me were that revenue grew by 3%, and it has free cash flow of £4.4bn.

The FTSE 100 has been littered with companies cutting dividends. Vodafone has halved its dividend but has decided to pay out, which is positive for investors. Its current dividend yield is over 6%, which is impressive. This is based on a yearly dividend of 7.9p and current share price close to 120p. 

Vodafone’s share price has nearly halved in the past three years. For me this represents an opportunity to pick up cheap shares. Vodafone is an established company that possesses great liquidity. I cannot think of many other FTSE 100 incumbents that are still paying dividends with such a high yield and that are operating in an industry I feel won’t be affected by this downturn. 

BT Group

BT’s share price has been falling for some time now. It is the UK’s largest telecoms operator. Five years ago the FTSE 100 stalwart’s share price was worth nearly 80% more than its current 100p per share. Three years ago its share price was worth close to 65% more than its current price.

On 7 May, BT released fourth-quarter and full-year results and announced there would be no annual dividend for the first time since privatisation in 1984. There will be no dividend next year either. Revenue and profit levels were down but analysts expect the extra cash to be invested into the long-term vision of the company. 

This long-term vision involves the rollout of 5G and new fibre broadband capabilities. Currently the largest domestic provider of fixed-line, broadband, and mobile telecoms services, BT is looking to expand. It is planning to offer fibre broadband to 4.5m homes and businesses by March 2021. Ambitiously, it is looking to reach more than 20m by the end of the decade.

Its share price is very low but there, but that must be against the lack of dividends until at least 2021–22. If you have the patience and appetite for stormy waters, BT shares can be picked up very cheap compared to five years ago. I would be tempted if the share price fell below 100p per share. But, if you don’t like the look of what BT is doing, there are plenty of other FTSE 100 companies that could make you money. 

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Jabran Khan has no position in any of the shares mentioned. 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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