Verizon Communications Inc. (VZ): Will Vodafone Group Plc (ADR) (VOD) Help You Retire Rich?

With those factors in mind, let’s take a closer look at Vodafone Group Plc (ADR) (NASDAQ:VOD).

Source: S&P Capital IQ. Total score = number of passes. *Based on normalized earnings.

Since we looked at Vodafone last year, the company lost a point, as its payout ratio climbed above the 75% mark. The stock has also struggled, losing about 5% over the past year.

Even with its tepid stock performance, Vodafone Group Plc (ADR) (NASDAQ:VOD)’s worldwide business has helped it weather the storm in its industry better than some of its European counterparts. In particular, France Telecom SA (ADR) (NYSE:FTE) and Telefonica S.A. (ADR) (NYSE:TEF) have both had to make dramatic moves to slash their dividends in the wake of poor economic conditions in Europe. Both Telefonica and France Telecom also have substantial operations outside their home markets, yet for Vodafone Group Plc (ADR) (NASDAQ:VOD), its 45% stake in the Verizon Communications Inc. (NYSE:VZ) Wireless joint venture has produced immense dividends that have helped it avoid the full brunt of the crisis.

One interesting idea that has come up, though, would involve Vodafone potentially giving up its stake in Verizon Wireless. For majority-owner Verizon Communications Inc. (NYSE:VZ) to buy out Vodafone, it would need to come up with $50 billion to $60 billion in financing to offer both cash and stock in a buyout. For its part, Vodafone is in no hurry to do a deal given the huge portion of the company’s overall value that the Verizon Communications Inc. (NYSE:VZ) Wireless stake represents, but CEO Vittorio Colao said he might be receptive to changes in the deal.

For retirees and other conservative investors, Vodafone represents a reasonable value in a depressed market. With better growth prospects ahead and a solid dividend, retirement investors should feel comfortable looking at Vodafone for telecom exposure in their portfolios.

The article Will Vodafone Help You Retire Rich? originally appeared on Fool.com nd is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends France Telecom and Vodafone. The Motley Fool owns shares of France Telecom.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.