Vodafone Shares
Discussion
Dividend payments are also linked to Verizon in the US. Very good.
I bought for 165 and they're def something I'm going to keep hold of.
With the introduction of 4G, we'll probably see some fluctuations in the market (mainly downwards because the fees the operators will be paying for 4G licences will be huge!), but a solid foundation for a portfolio.
If you're after gains, look into raw materials and oil. BLT and RDSB in particular. Cyclical prices and vary often.
I bought for 165 and they're def something I'm going to keep hold of.
With the introduction of 4G, we'll probably see some fluctuations in the market (mainly downwards because the fees the operators will be paying for 4G licences will be huge!), but a solid foundation for a portfolio.
If you're after gains, look into raw materials and oil. BLT and RDSB in particular. Cyclical prices and vary often.
Think you have to look at potential (and perhaps sudden) capital loss on these. Just as an illustration look at what Viber and whatsapp are doing to their text message revenues. Then replicate for other areas of their business and you will see how their earnings could come under pressure - hence the high dividend.
marky1 said:
Think you have to look at potential (and perhaps sudden) capital loss on these. Just as an illustration look at what Viber and whatsapp are doing to their text message revenues. Then replicate for other areas of their business and you will see how their earnings could come under pressure - hence the high dividend.
Apologies for being thick - why would a fall in future earnings result in a high dividend now ? 
Countdown said:
Apologies for being thick - why would a fall in future earnings result in a high dividend now ?
I think he meant dividend yield. The price has not increased (Marky1 asserts due to an expected fall in future earnings) by the same rate as the dividend has so that the historic dividend yield has fallen.I own VOD in my SIPP as I expect them to behave like a utility company, earning plenty of cash by selling increasing data and telephony to businesses and consumers, using infrastructure that is largely paid for & paying some of the surplus to shareholders as a rising dividend.
I'm not sure I would look at the last 20 years to predict the next twenty years on VOD. The Dividend is great but it's not too hard to see poor earnings at some stage that will knock their shares 30% over 3 days. That's why they are yielding 5.6%, to pay the holder a risk premium. There are better shares out there with say 4% yields and I think the downside is a lot smaller. Nothing wrong with holding VOD but I think you have to be open to the possibility of a capital loss at some stage in the next five years. At the end of the day you have to ask yourself why they yield so much.
Stock markets like shares that deliver earning growth....they don't like shares paying high dividends. People invest in stock markets for capital growth not yields. Businesses pay high dividends because they don't have anywhere decent to invest the cash. Vod is viewed as having ex-growth by the stock market. It's a utility not a growth story...it's a top three player in all it's markets so can't really grow in terms of market share. So it can make more money by identifying new revenue streams (very,very hard) or by opening up new markets in Emerging Markets.
Ergo it's a decent place to put your money but you aren't going to retire early on the back of it!
Ergo it's a decent place to put your money but you aren't going to retire early on the back of it!
Went to a funds presentation today by ashburton - they are saying equities and foreign governments emerging sovereign debts. Had a slide saying that most of the gains over time come from divs rather than capital growth which surprised me.
Said to watch out for too high divs - consistency is the name of the game..... Makes voda a good bet
Said to watch out for too high divs - consistency is the name of the game..... Makes voda a good bet
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