Vodafone Group (VOD): An Overlooked Telecom Giant

France Telecom SA (NYSE:FTE) operates across Europe and other markets that are expected to see weakness over the interim. Revenues are expected to be down 2% in both 2012 and 2013. Competition in the telecom’s main market – France – is also expected to remain tough, but a positive is the company’s plans to expand into faster growing markets, including continued expansion in Africa. Worth noting is that France Telecom does pay a dividend yielding 16%. Helping continue to fund this dividend will be possible disposals of underperforming assets, namely in Portugal. Jim Simons is one of France Telecom’s top investors (see Jim Simons’ top picks).

AT&T Inc. (NYSE:T) is another dividend-paying telecom, with a yield of 5.4%. Wireless revenues are expected to be up 5% in 2013, on the back of customer additions. AT&T is also trying to keep pace with Verizon in the spectrum and coverage race, and recently launched its 4G LTE network in ten new cities. The wireless company also announced that the FCC approved its acquisition of NextWave Wireless and WCS spectrum. Billionaire Ray Dalio of Bridgewater Associates calls AT&T one of his top dividend stocks (see Ray Dalio’s big bets).

Verizon Communications Inc. (NYSE:VZ) has some of the more robust spectrum assets. Verizon’s dividend – yielding 4.8% – is not quite as generous as AT&T’s, but it does appear that Verizon is the better value. Verizon trades at only 1x sales, whereas AT&T trades at a 50% premium. While AT&T is expanding its LTE network, Verizon is also keeping pace, investing $240 million in network enhancements in Florida recently. This investment has gone toward offering 4G LTE to Verizon customers throughout the state. Steven Cohen of SAC Capital is one of Verizon’s biggest backers after increasing his stake last quarter (check out Steven Cohen’s top picks).

In short, we believe that Vodafone’s access to emerging markets makes it a more compelling investment when compared to other dividend-paying telecoms like AT&T and Verizon. For more related coverage, continue reading here:

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