Why Vodafone, Capita, and Betfair Should Lag the FTSE 100 Today

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) was boosted in early trading by a strong rise in Severn Trent shares after the water utility became the target of a takeover bid, and it then soared to yet another five-and-a-half-year high of 6,649 points. But further falls in the mining sector helped drag the index back, and as of 8:50 a.m. EDT it has gained just 0.16% to 6,642 points.

Which other shares are acting as a drag on the FTSE indexes today? We take a look at three.

Vodafone
Vodafone Group shares have dipped 1% to 192 pence this morning despite news that the mobile-telecommunications giant is to receive a dividend payment of 2.1 billion pounds in June from its 45% stake in Verizon Wireless. Vodafone will announce its plans on how to use the cash when it publishes full-year results on May 21.

The Vodafone price has had a great run so far in 2013, but it has fallen back a little since a recent high of 197 pence on April 26. Looking ahead, the shares are on a P/E of a relatively modest 13 based on March 2013 expectations, falling to 12 for 2014 forecasts. Analysts are expecting a dividend yield of 5.3% this year.

Capita
Shares in Capita Group have fallen back 2.1% to 923 pence, but over a strong 12 months they're still up more than 40%. In the news today was an update from the diversified support group on its progress so far in 2013, and things sound pretty good, with 660 million pounds in new major sales wins so far. The firm also described its bid pipeline as strong, currently standing at 5.2 billion pounds (up from 4.8 billion pounds in November). There are no major contracts up for rebid in the next five years.

Capita has also been making acquisitions, snapping up seven companies so far in 2013 for a total cost of 165 million pounds. These cover various areas including justice and emergency services, customer management, education, and workplace services.

Betfair
The termination of a mooted takeover sent shares in Betfair Group down 3% to 869 pence by mid-morning. A third proposal -- by CVC Capital Partners, Richard Koch, and Antony Ball and partners -- had valued Betfair shares at 950 pence per share after earlier bids at 880 pence and 920 pence had been rejected.

This final offer was also rejected by the board, "on the basis that it undervalues the Company and its attractive prospects," and with the board believing that no further proposals would have any chance of success, all discussions were terminated.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that's offering a 5% yield and could be set for some nice share-price appreciation, too? It's the subject of our brand-new report "The Motley Fool's Top Income Share For 2013," which you can get completely free of charge -- but it will only be available for a limited period, so click here to get your copy today.


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