Share Centre share of the Week: Vodafone
“Vodafone has been added to our ‘buy’ list this week for investors willing to take on a low to medium level of risk. The company continues to expand and a number of recent acquisitions are allowing it to compete against larger telecoms operators’. Furthermore, the recent announcement regarding plans to launch a broadband and television service in the UK next year, demonstrates the group’s continued effort to seek new areas for potential growth.
“In a recent trading update, Vodafone said that the slowdown in some of the European markets had moderated compared to previous quarters. Investors should acknowledge that data demand continues to grow in Europe and smartphone penetration remains. Additionally, outdoor 4G coverage in the continent has increased to 65% from 38% a year ago and the uptake of 4G contracts remains encouraging.
“We have already seen a fair bit of M&A activity in the sector over the last year and as rivals consolidate and offer quad-play, we believe Vodafone will do the same to help drive earnings forward. The company has been streamlining its business, selling some of its non-core assets and using the proceeds to pay off debt, allowing the company to concentrate on other areas. The good dividend yield makes this an attractive stock for income seeking investors.”