Stock Purchase – Vodafone

This month I’ve decided to purchase shares in one company. At these early stages of Dividend Growth Investing I want to get make sure I have a Diversified Portfolio. I want to own shares in various companies from various different business sectors to minimise the individual impact a company has on my whole of my portfolio.

I want to own shares in one of the best performing companies in the Mobile Communications sector, and one company that stands out for most DGI’s is Vodafone.

I purchased 497 shares at 206.66p per share which cost £1,044.21 with charges included on 23rd May 2014. 

Vodafone have a great reputation for paying out consistently high dividends over a prolonged period of time. They’ve averaged 5.1% dividend payments over the last 5 years. I’m looking for companies to payout at least 3.5% dividends. I start to get excited if I come across any companies that payout over 4.5%, and anything over 5% is of GREAT interest to me. Vodafone has delivered for many years in this area.

One of the main appeals to Vodafone is their consistent drive to increase dividend payments every year. They’ve managed to increase dividends for the last 15 years. The smallest increase within the 15 years was 3.5% increase. Over the last 5 years their dividend payment has increased on average 7.2% year on year. It’s reassuring to know that Vodafone are committed to generating an increased payment to their shareholders consistently year after year. 

They also have sufficient Dividend Cover. Over the last 5 years they’ve averaged 1.79, and they’ve managed to have have more than 1.5 cover on all of the last 5 years which is my personal benchmark.

The share price was just below average. It’s been higher and lower than it is right now over the last 12 months, but when I saw the price drop from their recent end of year financial results, I thought it was a great opportunity to get a reasonable price for the shares. There were better valued shares on offer in the stock market, but I either owned shares in that company or in that sector already. When I took those shares out of the equation, Vodafone was one of the leading shares on offer. Ever since I’ve started DGI, I’ve wanted to own shares in Vodafone, and I’m pleased to announce that the time has come. Their ex-dividend date is due in the next 3 weeks and I’ll be receiving my first payout from them in August 2014. 

Not that it’s hugely significant, but Vodfone’s dividend payment in August has resulted in me receiving a dividend payment in every month of the year from my Portfolio now. This was not a factor in me buying the company as it doesn’t really matter when a company pays out. However, it was nice to see that I’m now in a position to be receiving some form of income every month. I just need to work on increasing that amount!

I now own shares in 13 companies, and 2 income funds. I’ve updated my Portfolio Page to reflect this addition. 


Do you own shares in Vodafone? Are you a happy shareholder? Have you purchased any shares in May?

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