Dial in to Vodafone’s cash flow

Vodafone's share price has taken a hit lately. But despite facing some serious challenges, it pays a handsome dividend backed by cash. And that makes it a buy, says Phil Oakley.

Big blue chip companies that pay large dividends are one of my favourite investments. That's because you are getting a large part of your investment return from dividends which are independent of the stockmarket's mood swings so they should prove to be quite resilient investments.

Enter Vodafone the biggest dividend payer on the UK stock market. The company reports its full year results tomorrow (Tuesday) and is expected to announce a 7% increase in its dividend to 9.5p per share. At its current share price of 164p that gives it an inflation-busting yield of 5.8%.

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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.