if you<u+2019>re fearful the trump rally will end in tears, buy vodafone . europe<u+2019>s largest telecom provider is well diversified, and its shares offer an increasingly rare combination of yield and value. of course, the company has its problems. those in india featured most prominently in half-year results tuesday. reliance industries is playing the disrupter with its cut-price jio brand , which launched in september. vodafone<u+2019>s key growth metric in the country slowed, and management took the precaution of writing down the value of goodwill and assets by <u+20ac>5 billion ($5.4 billion)<u+2014>more than a year<u+2019>s group operating profits. the shrinking, low-margin u.k. business is another headache. vodafone has been building high-quality landline networks in most european countries through a mixture of cable acquisitions, deals with utility providers and capital spending. but in the u.k. it is still selling consumer broadband services using rival bt group <u+2019>s old copper network. there was no hint in these results of the much-speculated deal with john malone <u+2019>s liberty global that would resolve this problem. yet these two countries together account for only a quarter of sales. overall, business is improving. underlying growth rose to 2.4% in the second quarter, the best in years, thanks in particular to a much-improved european mobile business. crucially, cash flows are also stronger now that the group is spending less on upgrading networks. these cash flows fund vodafone<u+2019>s big dividends, which give the shares an eye-catching yield of 5.5%. true, if the postelection rotation away from bonds and yield stocks gathers pace, telecom shares may come under further pressure. yet expectations of faster growth have been frustrated many times before, and vodafone<u+2014>with an enterprise value just 6.3 times its earnings before interest, taxes, depreciation and amortization<u+2014>doesn<u+2019>t trade at a bond-like valuation premium. on balance, it looks a good time to pick up the phone. write to stephen wilmot at stephen.wilmot@wsj.com
call vodafone if you want diversified dividend yield - wsj
stephen wilmot