Picture supply: Vodafone Group plc
communication firm vodafone (LSE: VOD) has typically seemed unloved by inventory market buyers lately. Nevertheless, issues positively improved in 2025, with Vodafone’s share value rising by 40%.
Nonetheless, it is nonetheless 22% under the place it was 5 years in the past (over 80% under the place it was in 2000!).
Nevertheless, this 12 months’s robust momentum didn’t seem out of nowhere. I believe there are some clear causes behind it. So must you make investments now in hopes of additional development within the Vodafone share value over the subsequent 12 months?
Dividend development has returned, however the base is low
Vodafone cheered buyers this 12 months by saying its first dividend enhance in years. Nevertheless, this was compounded by final 12 months’s painful dividend minimize. That has occurred many occasions over the previous few a long time.
So what does the corporate’s dividend coverage counsel to buyers? On a constructive notice, larger dividends and obvious monetary self-discipline could possibly be seen as constructive components for the inventory value. The present dividend yield of 4.2% is considerably larger than the dividend yield. FTSE100 common.
However over the long run, Vodafone’s dividend per share is now a shadow of its former self. This highlights the tough financial scenario within the telecommunications enterprise, the place massive licensing and infrastructure prices typically weigh closely on working earnings.
Cellular cash stays a strong story
This 12 months, airtel africa The inventory value soared 179%. A lot of the joy round this share comes from its Africa-focused digital funds enterprise.
However Airtel Africa is just not the one FTSE 100 firm with a big and rising cellular cash enterprise on the continent. Vodafone has a big presence right here, a sizeable buyer base throughout a number of nations, and can be trying to develop its cellular cash enterprise.
Within the first half of this 12 months, Vodafone had 94 million monetary companies clients in Africa. When changing native billing currencies into euros (Vodafone’s monetary reporting forex), income development was damage by change charge depreciation. I see that as an ongoing danger for Vodafone, and I’ve seen it problem Airtel Africa’s operations as properly.
Expressed in euros, Vodafone’s first-half African income rose 7% year-on-year. In truth, we predict that is fairly unimpressive given the scale of the chance, the expansion alternative available in the market, and Vodafone’s aggressive benefit that ought to assist it capitalize on it.
I believe Vodafone’s share value may rise in 2026 if it succeeds on this and proves there may be vital continued development potential in its cellular cash enterprise.
blended bag
As an investor, I proceed to have blended emotions about Vodafone. I like the corporate’s robust place in lots of European and African markets, its confirmed money technology potential, and the scale of the cellular cash alternative.
Nevertheless, the corporate’s web debt elevated within the first half, and its long-term dividend efficiency was disappointing.
Nonetheless, I see some wind within the wind for the inventory, and there are causes to stay optimistic. This enterprise has quite a few vital strengths that we predict may probably justify the next valuation. I believe this can be a inventory that buyers ought to contemplate.