In This Article:
- By GF Value
The stock of Vodafone Group PLC (NAS:VOD, 30-year Financials) gives every indication of being fairly valued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $18.51 per share and the market cap of $52.3 billion, Vodafone Group PLC stock shows every sign of being fairly valued. GF Value for Vodafone Group PLC is shown in the chart below.
Because Vodafone Group PLC is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.
Link: These companies may deliever higher future returns at reduced risk.
It is always important to check the financial strength of a company before buying its stock. Investing in companies with poor financial strength have a higher risk of permanent loss. Looking at the cash-to-debt ratio and interest coverage is a great way to understand the financial strength of a company. Vodafone Group PLC has a cash-to-debt ratio of 0.23, which is in the middle range of the companies in Telecommunication Services industry. The overall financial strength of Vodafone Group PLC is 3 out of 10, which indicates that the financial strength of Vodafone Group PLC is poor. This is the debt and cash of Vodafone Group PLC over the past years:
Investing in profitable companies carries less risk, especially in companies that have demonstrated consistent profitability over the long term. Typically, a company with high profit margins offers better performance potential than a company with low profit margins. Vodafone Group PLC has been profitable 6 years over the past 10 years. During the past 12 months, the company had revenues of $50.7 billion and earnings of $0.977 a share. Its operating margin of 20.34% better than 81% of the companies in Telecommunication Services industry. Overall, GuruFocus ranks Vodafone Group PLC's profitability as fair. This is the revenue and net income of Vodafone Group PLC over the past years: