Vodafone gets boost from US stock pickers

Vodafone, one of Britain's biggest companies, has been given a boost today after a positive assessment from the respected US business journal Barron's.

The magazine argues that Vodafone is undervalued despite its sluggish performance in the last 12 months.

The key issue is the firm's 45% stake in Verizon Wireless, the US mobile provider that is beginning to pay serious dividends ($4.5bn expected in 2012).

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Vodafone will be passing its portion of those payouts back to shareholders at a rate of $2 for a total 7.5% yield on its US stock listing. Significantly, the above may become an annual and recurring event, Barron's says, describing the first of those dividends as a potential 'watershed' event.

Added to that is its strategic position in important emerging markets like Turkey and India and the tantalising prospect of a full blown merger with Verizon Communications (which owns 55% of Verizon Wireless). Barron's believes Newbury based Vodafone is a buy.

At 2:59 GMT Vodafone was the fifth biggest riser on the FTSE, up 0.86% at 181.6p.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.