Vodafone Group PLC (VOD)

A telecommunications company, essentially in the mobile space. It is basically in the UK, but only 10% of its earnings come from the UK. This is a cash return story. We are in “a lower for longer” environment. This is throwing off close to a 7% yield. As long as it stays flat, you’ve got a pretty good return in an otherwise lacklustre market.

A UK telco company, a mobile player really. Only 10% of its revenues and earnings come from the UK. It is mainly Pan-European. Extremely strong growth is coming up in the next little while. It has integrated an acquisition, but it trades cheaper than the US and Canadian telcos. Dividend yield of about 6.7%.

(Top Pick Jul 6/15, Down 9.13%) He sold above where it is now, not because of Brexit but because he had a lot of telecom exposure around the world and this was the least attractive one.

The difficulty with many of the European phone companies is competition along with price cutting, so it is hard to keep the margins up. Their dividends have declined. They had to cut them in 2015. Free cash flow has been in decline, and are now negative for 2015.

He has too much exposure to telecom and this one is the obvious candidate to lighten up on. Prefers BCE-T.

Very competitive sector. He got out of this stock and is not in the sector. A difficult sector to get a lot of growth out of.

It generally has worked out well for him to have exposure to telecom stocks including this one. He is thinking it is time to move out of telecom. This is probably the one he will lighten up on. There is uncertainty over growth, Europe and the dividend.

85% of its revenues is from emerging markets, so it is a great emerging-market play. It gives you a big play on India and Eastern Europe, and it should start to reflect this. Decent dividend yield of about 7%.

(A Top Pick Jan 12/15. Down 3.51%.) A UK-based international telephone company. Underperformed last year, but this year he is seeing some early strength in Italy. In the Netherlands they are talking with Liberty Entertainment about doing a joint venture. Thinks the worst has been seen, and there is some good consolidation and growth coming out of it.

This is international and they sold off their Verizon Wireless to Verizon, so they have cash to redeploy. If you want to stay in the telecom space, there is probably faster growth in the areas where Vodafone is. If you come back to the US or Canada, it is really a mature market, and you are not going to see a lot of growth.

He would be more inclined to be a seller in this sector rather than a buyer. It’s a very competitive sector and in emerging markets, it is usually competitive. Margins are getting skinnier rather than fat.

Vodafone (VOD-Q) or AT&T (T-N)? If looking for global exposure, he would suggest this, which sold its 40% share in Verizon Wireless to Verizon. It is effectively an emerging market play, because the vast majority of its revenues, although not its profits, come from places like India and Africa. The major problem it has is that its European exposure is leaking subscribers, so after the last 10 years it is up somewhat. Expected to be making money over the next 10 years out of its emerging-market exposure.

Not a growth stock, so not a company he would hold in his growth fund. However, it is a very good company. If you are looking for a dividend yield, there is nothing wrong with owning this. They are suffering in emerging markets, because everybody is right now. Have a very good business in India and feels the prospects for them are rather positive. Dividend yield of 7%.

Exited the whole sector when the whole Verizon deal came forward. The negative is that the growth prospects are flat. He likes yield, but wants some growth attached. This is in a very competitive marketplace.

Europe used to be far ahead of us in cellular. Now North America with LTE is ahead of Europe. They are starting to spend money on infrastructure and raising rates there. In Europe the government wants to decrease the number of players.