#2 – Vodafone Group Plc (ADR) (NASDAQ:VOD)
Vodafone Group Plc (ADR) (NASDAQ:VOD) is one of the world’s largest telecommunications businesses. The company currently has a market cap over $100 billion.
Vodafone owned a 45% stake in Verizon Communications Inc. (NYSE:VZ) from 1999 through 2014. The company sold its 45% stake in Verizon Wireless for $130 billion, making it one of the largest business transactions in history.
About 80% of Vodafone’s revenues come from mobile users. The company has mobile networks in 26 countries and partners with mobile networks in over 50 additional countries. Vodafone’s largest markets by percentage of revenue generated for the company are listed below:
– Germany: 22% of revenue
– United Kingdom: 16% of revenue
– India: 10% of revenue
– Spain: 9% of revenue
Vodafone Group Plc (ADR) (NASDAQ:VOD) makes up 0.3% of David Einhorn’s portfolio. The company has an exceptionally high dividend yield of 6.3% which should appeal to income oriented investors.
Vodafone’s high yield is certainly the most attractive detail about the stock. Vodafone’s cash flows per share reached $8.68 in 2006. In 2013 – before the Verizon sale – cash flows per share were $7.66. In 7 years the company had slightly negative growth in cash flows per share.
While Vodafone will likely not wow investors with rapid growth, the company’s dividend is secure. Vodafone has a cash hoard of nearly $17 billion on its balance sheet. Additionally, Vodafone has very steady cash flows. The company’s stability and large cash position make it dividend payments secure.
Vodafone is currently trading for a just 7 times expected 2015 cash flows. The company appears undervalued based on its low price-to-cash-flow multiple. Investos in Vodafone Group Plc (ADR) (NASDAQ:VOD) should expect returns from the company’s 6.3% dividend, and possible gains if the stock’s valuation multiple increases.
#1 – General Motors Company (NYSE:GM)
General Motors Company (NYSE:GM) is one of the largest auto manufacturers in the world. The company currently has a market cap of over $58 billion. General Motors has a dividend yield of 4% and makes up 4.6% of David Einhorn’s portfolio. David Einhorn is not the only billionaire investor to load up on General Motors. It is one of Warren Buffett’s highest yielding holdings as well.
General Motors has undergone significant deleveraging since declaring chapter 11 bankruptcy in 2009. General Motors currently has a debt to equity ratio of 1.3, versus 4.9 for rival Ford (F). The company returned to the stock market in 2010. Since that time, General Motors has been profitable every single year.