Vodafone Group Plc (ADR) (VOD) is expecting $130 billion in cash and stock from Verizon Communications Inc. (VZ) early next year when Verizon buys Vodafone‘s interest, and Vodafone is looking to maintain its 5% cash dividend post-deal, says Stuart Shikiar, Chairman and Chief Investment Officer of Shikiar Asset Management Inc.
“Vodafone is based in London, and for the last 15 years it has had a 45% interest in Verizon Wireless, which is the real cash cow of Verizon, and that asset is extremely valuable — so much so that Verizon decided to buy it from Vodafone. At closing, early next year they will pay Vodafone $130 billion in cash and Verizon stock,” Shikiar said.
FOR MORE INFORMATION ABOUT THIS INTERVIEW CLICK HERE.
Vodafone currently pays a 5% cash dividend, which Shikiar expects to continue, and as a company with a low multiple, high cash dividend and other catalysts to propel the stock higher, VOD is one of Shikiar’s larger portfolio holdings.
“The catalyst there was that we own a company in two businesses we like, technology and telecommunications. Its valuation when we purchased it was very reasonable. Vodafone pays a 5% cash dividend, which it still will post deal, and we were very happy to own it whether or not they sold Verizon Wireless, but our view was that at some point they would indeed get a deal done and that it would become an even more attractive investment. Vodafone really checked all the boxes that we look for in an important holding, in fact our third largest,” Shikiar said.
Biotech with a $2 Billion Market Cap has a $10 Billion Wet AMD Treatment in Development
April 10, 2019
Sirius XM Radio Inc (SIRI) on High-Growth Trajectory, Generating $130 Per Listener Per Year Compared to Pandora’s $8
November 12, 2013
Netflix, Inc. (NASDAQ:NFLX) Expands Internationally to 130 New Countries
July 25, 2016
Simon Property Group, Inc. (SPG) Earns $1 Billion Free Cash Flow from Operations After Dividend and Capex
June 18, 2013
Agrium Inc. (USA) (AGU) Has Potential to Grow Cash Flow to $1 Billion and Dividend to $4 Per Share
July 25, 2014
