Wednesday, May 16, 2012

Stock Bought: VOD

Today I bought shares of Vodafone Group (VOD), a multinational telecommunications company headquartered in the United Kingdom.

I wrote about some of the reasons why I like VOD when I initiated a small position in the stock in March. At that time I indicated that I was planning to buy more shares pending the availability of cash and a price that remained attractive. Today's dip of nearly 2% in the stock's price provided me with the opportunity for which I had been waiting, enabling me to increase my position in VOD before the ex-dividend date of June 6 for the final dividend payment in 2012 (VOD pays semi-annual dividends).

I bought 50 shares of VOD at the price of $26.87 per share, which happens to be the same price at which I initiated my position. Consequently, I now have a total of 80 shares at the price of $26.87 per share, giving me a 5.40% yield on cost. At the current dividend rate, excluding any special dividend, I can expect to receive $116.84 in annual dividend income, which is $73.03 more than before. I am now satisfied with the size of my position in VOD, so I do not have any additional purchases of the stock planned at this time.

That said, I also have no other purchases planned for May because I have depleted the cash in my brokerage account. Thus, I will simply be watching the market from the sidelines for the next 2-3 weeks until I have more capital to invest from monthly savings.

5 comments:

  1. Deedubs,

    Great purchase here.

    VOD is currently my favorite telecom. They're not as heavily leveraged as many others, and the geographical footprint can't be beat. They're almost everywhere. Management has been prudent and the yield is pretty strong, even without the special dividend. Strong valuation and a solid business here. If I didn't have 100 shares already I'd be adding on this weakness as well.

    Best wishes!

    ReplyDelete
    Replies
    1. Hi Dividend Mantra,

      Thanks! VOD is also my favorite telecom and I agree with your assessment of the company. I think it will do well for many years to come.

      Cheers,

      Deedubs

      Delete
  2. Nice income increase with this purchase, I bet VOD will do well for you. If Vodafone starts paying quarterly I might have to snatch some up. I track my progress quarter to quarter, which is why I avoid semiannual payers. My system probably isn't optimal, but seeing progress motivates me to better control my spending and not give up.

    Take care

    CI

    ReplyDelete
    Replies
    1. Hi Compounding Income,

      Thanks for your comment. I'm looking forward to the large dividends I'll be getting from VOD, even though they'll only come twice each year. I would also prefer quarterly payments, but I am okay with having a few stocks that pay on alternative schedules.

      Cheers,

      Deedubs

      Delete
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    With voice, text & data plans costing you £0.00/month.

    ReplyDelete