Is It Still Safe to Buy Vodafone Group?

LONDON -- I'm always searching for shares that can help ordinary investors like you make money from the stock market. However, many people are currently worried the market could be overheating.

So right now I'm analyzing some of the most popular companies in the FTSE 100, hoping to establish if they can continue to outperform in today's uncertain economy.

Today I'm looking at telecoms giant Vodafone  (LSE: VOD  ) (NASDAQ: VOD  ) to determine whether the shares are still safe to buy at 192 pence.

So, how's business going?
Recently, investors have been drawn to Vodafone amid speculation the company could be interested in selling its share of Verizon Wireless, the company's U.S. joint venture with Verizon Communication.

Vodafone's Verizon Wireless stake is estimated to be worth around 60 billion pounds, more than half of Vodafone's current 94 billion pound market value, so any deal could be extremely lucrative for both Vodafone and its investors.

However, while the majority of the market is focused on Vodafone's U.S. operations, it appears the rest of the company is struggling.

In particular, during 2012/13, the company's overall revenue fell by 4%. In addition, the only region where the company's revenue grew, outside of the U.S., was in Northern Europe, where revenue expanded 3%. Revenue fell by 17% in Southern Europe and 3% in Africa and Asia.

Having said that, Vodafone's profits from its share of Verizon Wireless grew 31%, which boosted the company's overall profit by 9%.

Expected growth
Thanks to the rising profits from Vodafone's share of Verizon Wireless, City forecasts currently predict Vodafone's earnings per share will be 16.4 pence this year (5% growth) and 17.4 pence for 2015. However, these figures could quickly change if Vodafone sells its stake in Verizon Wireless.

Shareholder returns
Vodafone is well known for its dividends and it appears these generous payouts are set to continue. Furthermore, I believe these generous payouts will be safeguarded, whatever happens to the company's share of Verizon Wireless.

Vodafone's dividend yield is currently 5.2% -- larger than that of its peers in the mobile telecommunications sector, which currently offer an average dividend yield of 4.9%.

Valuation
Vodafone currently trades at a historic P/E of 12.4, while its peers trade on an average historic P/E of around 12.1, which makes Vodafone appear fairly valued.

Foolish summary
Despite Vodafone's falling revenue outside of the U.S., the company still offers a solid dividend yield and does not appear to be expensive when compared to its peers.

Moreover, the company's share of Verizon Wireless continues to throw off huge amounts of cash and any sale could be lucrative for Vodafone's investors. So overall, I believe that Vodafone still looks safe to buy at 192 pence.

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As well as Vodafone, I am also positive on the five FTSE shares highlighted within this this exclusive wealth report.

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In the meantime, please stay tuned for my next FTSE 100 verdict.


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