Vodafone Group Plc (ADR) (VOD) or BAE Systems PLC (ADR) (BAESY)? Which Is The Better Buy?

Which share should I buy?
Both Vodafone and BAE have been the subject of recent merger stories, but while BAE Systems PLC (ADR) (OTCBB:BAESY)’s failed merger with Airbus manufacturer EADS is now a closed book, Vodafone’s situation is much less certain.

It seems increasingly likely that Vodafone will negotiate some kind of deal to sell its 45% stake in Verizon Wireless to its parent firm Verizon Communications Inc. (NYSE:VZ). Although this would provide a windfall for Vodafone, Verizon Communications Inc. (NYSE:VZ) Wireless is the most profitable part of its business, creating some uncertainty as to how well it would fare without its U.S. arm.

Both firms offer similar dividend yields, but Vodafone’s price has been pushed up by the recent bid speculation. Today, I would rather take advantage of BAE Systems PLC (ADR) (OTCBB:BAESY)’s low price and cash-rich status, and top up my holding in the U.K.’s largest defence company.

The article Should I Buy Vodafone Group or BAE Systems? originally appeared on Fool.com is written by Roland Head.

Roland Head has no position in any stocks mentioned. The Motley Fool recommends Visa, Vodafone, and Vodafone Group.

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