Vodafone is one of the largest mobile carriers in the world, with over 300 million customers using its services across Europe and Asia. With almost €45 billion in revenues and a massive user base worldwide, Vodafone is a European telecoms leader and a strong player in the 5G domain. Vodafone shares are listed on the London Stock Exchange, and the company is a core element of the FTSE 100 Index, but is now a good time to buy Vodafone shares?
This guide will discuss everything you need to know about investing in Vodafone. This includes the reasons why Vodafone shares attractive, reviews of the best UK share brokers, and a step-by-step walkthrough of how you can buy Vodafone shares today.
Table of Contents
How to Buy Vodafone Shares in 3 Simple Steps
In a hurry and no time to read? Don’t worry! Simply follow these 3 simple steps to buy Vodafone shares now.
Step 1: Choose a Broker
To buy Vodafone shares, you need a UK broker that offers shares listed on the LSE.
Step 2: Fund Your Account
Fund your account using a debit/credit card, bank transfer, or e-wallet such as PayPal.
Step 3: Buy Vodafone Shares
Search for Vodafone shares, choose how much you want to invest and confirm the order.
75% of retail investors lose money when trading CFDs with this provider.
Where To Buy Vodafone Shares
To help you out, we’ve reviewed the best UK brokers that offer Vodafone shares.
1. eToro - Market Leading Social Trading Broker
eToro is our number one pick for the best UK platform on which to buy shares. For starters, this broker offers over 800 global shares, including Vodafone. Unlike many brokers it offers users the choice to buy shares or trade share CFDs with up to 1:5 leverage, so the choice is yours.
This broker is also notable for its low fees, with 0% commission, competitive spreads and just a $5 withdrawal fee. It also offers fractional share purchasing, meaning you can buy smaller portions of Vodafone shares if you want to invest small amounts at a time.
If you’re looking for a platform that offers more than just traditional trading, then you should check out eToro’s social and copy trading features. You can engage with any of eToro’s over 12 million users, and you can even copy the entire investment portfolios with the help of eToro’s CopyTrader tool!
You can begin trading on eToro with a $200 minimum deposit, or if you want to give the platform a test-run, you can try the $100,000 demo account. eToro is licensed by a number of leading authorities, including the FCA, so you rest easy in the knowledge it’s a safe and secure platform.
- Copy Trading: Mimic professional traders’ positions
- Global Shares: Trade more than 800+ global companies
- 100% Commission Free: Competitive spreads for share trades
- Trustworthy: FCA regulated
- High CopyPortfolio Minimum: $5,000
2. Plus500 - CFD Broker with Share Price Alerts
This popular UK broker is a specialist CFD trading platform, which means you can’t buy Vodafone shares in the traditional sense, but you can trade CFDs with up to 1:5 leverage. With no commission, very tight spreads and no withdrawal fees, Plus500 is among the most affordable brokers in the UK market.
Plus500 has its own proprietary platform that is very user-friendly and comes with a number of useful features. These include basic charting tools and custom price alerts that can be customised and sent to your mobile via the Plus500 trading app. This means you never have to worry about missing an opportunity to buy Vodafone shares.
The minimum deposit for this broker is just £100, which is low in comparison to many other platforms. You can choose from a range of payment methods, including PayPal. Plus500 is licensed by the FCA and its parent company is on the London Stock Exchange, so you needn’t have any concerns about safety.
- Price Alerts: Catch the next pullback for trading
- Leverage: Trade share CFDs at up to 20:1
- Beginner-friendly: Easy to use trading platform
- Limited Analysis: No backtests or custom technical indicators
3. Capital.com - UK Broker with AI-Based Trading Bot
Capital.com is a UK-based broker that launched in 2016 and, like Plus500, deals exclusively in CFDs. Something that’s immediately notable about this broker is its huge selection of share CFDs, with over 2,000 instruments available to trade.
Another thing that stands out about Capital.com is its impressive proprietary trading platform. The investment platform offers a range of impressive features, such as an AI trading bot, in addition to trading tools like advanced charts, drawing tools, technical indicators and risk management tools.
Capital.com is also a good choice for new traders due to its excellent educational resources, which include webinars and guides. You can trade share CFDs without commission on this platform, and the spreads it charges are also very competitive.
- AI Trading: Use a trading bot to find new ideas
- Trader Education: Includes education-based mobile app
- Low Fees: No withdrawal fee and low inactivity fee
- No Backtesting: Doesn’t enable you to test out your trading strategy
4. FinmaxFX - New CFD Broker with High Leverage
FinmaxFX is one of the newest brokers on the market, having been launched in 2019. This broker offers CFDs for a range of asset classes, including shares. Unlike the other brokers on this list, trading on FinmaxFX takes place on the MetaTrader 5 platform, providing access to a range of advanced tools and features like trading robots.
One of the most notable things about FinmaxFX is its high leverage limits – you can trade CFD shares with up to 1:20 leverage with this broker, much higher than the 1:5 leverage offered by European brokers. This is because FinmaxFX is licensed in Vanuatu, so it’s not restricted to the same limits.
Something to keep in mind about FinmaxFX is its spreads are higher than those charged by other brokers like Plus500, and there’s a withdrawal fee of up to 3% to consider. However, if you’re looking to trade shares with high leverage, this broker is a good option.
- Mobile Trading Apps: For iOS and Android devices
- Includes MetaTrader 5: Advanced indicators, trading signals, and backtesting
- 180 Global Shares: Trade popular US, European, and Asian companies
- High Spreads: Higher than average for shares
Why Buy Vodafone Shares?
Vodafone is one of the largest telecoms carriers in the world, with exposure to some of the fastest-growing markets in the world (Africa and India). With its heavy investments in 5G and improving margins in its core business, Vodafone shares present a blend of defensive and growth profiles.
To help you decide whether Vodafone is the right investment for you, below are some elements that make Vodafone shares attractive to buy.
1. Strong core growth
After having divested several of its loss-making non-core divisions, Vodafone managed to renew its focus on its core and show strong growth. In the last fiscal year, Vodafone’s organic service revenue growth was 0.8% (total group revenue grew by 3%), with organic adjusted EBITDA growing 2.6%. This is primarily due to Vodafone’s efforts in reducing its operating expenses, mainly in Europe where it saved €400 million in OPEX as part of its ongoing efforts.
In addition to this year-on-year growth, Vodafone’s adjusted EBITDA margins of 33.1% mark the fifth consecutive year of margin expansion, showing that the group slow growth in Europe and deeper forays in Africa bring along an increased profitability.
As Vodafone develops new solutions in the 5G, IoT and mobile payment spheres while maintaining its strong position in legacy mobile, business and fixed telecoms markets, the group should continue to grow profitably in the years to come.
2. Excellent liquidity position in the medium term
At the beginning of 2020, Vodafone had a large debt balance (€54 billion) but showed no sign of liquidity issues. Indeed, the company had almost €20 billion in cash, with only €7 billion in debts maturing in the next three years.
With a large cash pile, strong free cash flow generation from its business and the bulk of the company’s debt in the distant future, liquidity is strong and allows Vodafone to weather the coronavirus crisis well.
3. Well-positioned for the 5G revolution
5G technology is expected to change our lives, from the way we communicate and work to the transportation we use and the objects we use daily. As a telecom giant and leader in several European and African markets, Vodafone has invested hundreds of millions of euros in developing a 5G network to be a European leader in the business.
At the beginning of 2020, Vodafone had launched 5G technology in over 100 cities in 11 countries, with plans to continue rolling out the technology in more cities and markets. With the game-changing technology on the brink of becoming mainstream, Vodafone and other 5G stocks are set to be the prime beneficiaries of this technological revolution.
4. A strong history of returning capital to shareholders
Beyond returning to profitability, refocusing its portfolio and growing its operations, Vodafone is famous for its generous dividend and share repurchase programs. At the time of writing, Vodafone offered a mouthwatering 6.12% dividend yield, with no stated intentions to cut it.
Beyond dividends, Vodafone has carried out several billion-euro share buybacks in the past, highlighting its commitment to shareholders. As such, Vodafone shares have a strong income component that many investors will greatly enjoy.
Last, the coronavirus crisis had little impact on Vodafone’s business, which continues to generate cash flows that can be used to return capital to shareholders.
5. Direct exposure to the fast-growing Indian market
A last and critically important dimension of the attractiveness of Vodafone shares comes from the company’s web of stakes in joint-ventures and associates. This not only includes a 50% stake in VodafoneZiggo (large player in the Dutch telecoms market) or 26.1% of Safaricom (leading Kenyan mobile carrier with >35 million customers), but 44.4% of Vodafone Idea, one of the largest mobile carriers in India.
With almost 300 million mobile customers in India and almost 28% in market share of the Indian mobile market, Vodafone Idea offers Vodafone strong exposure to the world’s largest and fastest-growing mobile telecoms market. Vodafone Idea has a tough battle ahead against other giants like Reliance Jio or Bharti Airtel, but the Indian market’s size and growth nonetheless offer a myriad opportunities to the company. With a non-controlling but significant stake, Vodafone should continue to benefit from its exposure to India.
About Vodafone Shares
Company History & Business Model
Vodafone is one of the UK’s largest telecom operators, with operations in Europe, Asia, Africa and Oceania. In 2018, Vodafone was the world’s fourth largest mobile operators by number of users (>300 million), behind China Mobile, Bharti Airtel and Vodafone Idea, in which Vodafone had a 45% stake.
Founded in 1991, Vodafone is based in London and listed on the London Stock Exchange and on the NASDAQ. A member of the FTSE 100 Index, Vodafone is the 5th largest company in the UK by revenues, with nearly €45 billion in 2019. At 2019 year-end, Vodafone employed over 93,000 employees worldwide.
The company’s main operations are in Europe and Africa, representing together 93% of the group’s 2019 revenues. Its business is split between three segments: Consumer, Business and Other.
Vodafone’s Consumer segment offers a range of standard mobile services including call, text and mobile data, but also fixed (i.e. landline) broadband, TV and voice services. Consumers can also access other services such as “V by Vodafone”, an IoT consumer platform to connect smart devices, and a series of security and insurance products. In Africa, Vodafone offers a mobile payments and financial services platform named M-Pesa, with over 41 million customers.
Europe is the largest Consumer sub-segment for Vodafone, representing over 100 million customers and generating 52% of the company’s overall service revenue (€38 billion in 2019). Germany is Vodafone’s largest market by far (€10.7 billion in service revenues in 2019), followed by the UK (€5 billion) and Italy (€4.8 billion). Africa is Vodafone’s fastest-growing Consumer sub-segment, with over 41 million M-Pesa users and over 82 million mobile users, but only represents 12% of service revenue.
Business is Vodafone’s second main segment, generating 28% of service revenue in 2019. Services include mobile and fixed telecoms, Internet of Things (“IoT”) platforms and services, cloud services and other various services.
Last, the “Other” segment (8% of 2019 service revenue) includes the rental of cell service to mobile virtual network operators (“MVNOs”, i.e. companies that do not own the cell towers) and associated services to MVNOs.
In 2019, Vodafone generated €38 billion in service revenues, €7 billion in equipment & other revenue, with adjusted EBITDA of €15 billion (+2.6% year-on-year).
Vodafone Share Performance
Vodafone is listed on the NASDAQ (via American Depositary Shares) and on the London Stock Exchange under the VOD and VOD.L tickers.
Since February 2020, prior to the coronavirus crisis, Vodafone shares have fallen 17%, primarily due to a large debt load that raised eyebrows in a low liquidity environment. Nonetheless, Vodafone was one of the few companies whose business was not or only marginally affected by coronavirus.
While Vodafone shares suffered in the past from a series of loss-making quarters, Vodafone’s strong commitment to divesting non-core businesses and cutting operational and unnecessary capital expenditures is setting the company back on the right track.
With widening EBITDA margins, better OPEX and CAPEX management and the divestitures of loss-making operations, Vodafone continues to grow its top line and improve its bottom line, as shown by the fast-improving operating profits (€4 billion in 2019 vs. a €1 billion loss the year prior). At the time of writing, Vodafone had no intention of cutting its dividend for 2020.
Currently, the analyst consensus is an overwhelming “Buy”, with mean price targets around overwhelmingly “Buy”, with next 12 months price targets between 126p and 269p (average of 201p).
How To Buy Vodafone Shares Using eToro
Now we’ve explained the reasons why some investors consider Vodafone one of the best stocks to buy, you may want to invest for yourself. If so, we’re going to show you to how to invest in stocks on our recommended UK stockbroker, eToro.
If you want to buy Vodafone shares on another platform, the process remains similar.
Step 1: Search for Vodafone (VOD) shares
Using eToro’s handy search function, look for Vodafone or its ticker (VOD). You will see two search result types: Markets and People. Markets displays the tradable instruments (e.g. shares) that match your search, while People shows you other trader profiles. The ability to look up other traders, see what their performances have been and allocate money to copy them is at the core of eToro’s social trading system.
Note that the Vodafone shares listed on eToro correspond to the American Depositary Shares listed in USD on the NASDAQ, and not to the shares listed in pence on the London Stock Exchange.
Step 2: Select “Trade” to get started
Once you have done your research, read the annual reports, understand Vodafone’s business and the specific risks, you are ready to start trading!
Make sure to use your portfolio if you want to trade with your own money, or eToro’s free demo account for free paper trading.
When you are ready, click “Trade” to open the trading window and specify the direction, amount and options of your order.
Step 3: Confirm order
In the trading window, the first step is to specify whether you want to buy or sell Vodafone shares. eToro allows you to buy directly or trade and short-sell stocks via CFDs.
You can then specify how much, in dollars or in number of shares (including fractions!) you wish to buy. You will see an indicator that shows you how much of your equity is exposed in a given trade, a particularly useful tool for leveraged orders. Note that long orders that do not use leverage are executed directly, while leveraged and short orders are made via CFDs.
The next step is to decide whether you wish to execute your order at market or at a given limit. The choice of the order type is dependent on your trading strategy, and you may even want to use eToro’s stop-loss or take-profit special order types.
Last, specify the leverage (if any) that you want for your trade, review the fees at the bottom if your trade is via CFDs (no commissions on trades otherwise) and click “Open Trade” or “Set Order” outside of market hours!
Should I Buy Vodafone Shares?
Vodafone is one of the largest and best-known telecom companies in the world, generating gargantuan revenues and offering a high dividend to its shareholders. Consequently, buying Vodafone shares looks like an attractive proposition.
If you do want to buy Vodafone shares, we think there’s no better place to do so than eToro. This is due to the broker’s 0% commission, excellent copy trading tools and the ability to buy shares or trade share CFDs. Simply click the link below to get started on eToro today!
eToro: Buy Shares with 0% Commission
- Buy over 800 global shares
- No commission and tight spreads
- Social and copy trading tools
- Accepts PayPal
- FCA regulated
Where is Vodafone based and listed?
Vodafone's global headquarters are in London and the company is listed on the London Stock Exchange and on the NASDAQ (via American Depositary Shares), and is part of the FTSE 100 Index.
What's the difference between Vodafone and Vodafone Idea?
Vodafone is the diminutive for Vodafone Group PLC and is the UK-based telecoms provider discussed in this article. Vodafone Idea is one of the largest Indian telecom operators and is owned at 45% by Vodafone Group PLC.
What business is Vodafone in?
Vodafone is a classic telecom operators, with Consumer services including mobile, landline, broadband, mobile payments (in Africa only) and TV. It also offers Business mobile services and derives revenues from leasing some of its spectrum to virtual mobile carriers.
Beyond your guide, what should I read before buying Vodafone shares?
We highly recommend you to read the company's annual reports, review its press commentary and listen to what analysts have to say to form your opinion. Make sure you understand the business and the risks before buying Vodafone shares!
Can I buy fractional shares of Vodafone?
Many of the brokers reviewed in this article allow you to buy or short fractional shares of Vodafone, mainly via CFDs.
Does Vodafone pay a dividend?
Vodafone has been a top dividend payer for years, with the current dividend yield in excess of 6%. At the time of writing, Vodafone had no intention of cutting its dividend payout for 2020.