Vodafone to gain from Verizon iPhones: Barron

NEW YORK, USA: Investors looking to bet on Verizon Wireless's launch of the Apple iPhone should consider buying shares of Verizon's partner Vodafone rather than more expensive Verizon stock, Barron's said in its Jan. 17 edition.

The U.S. financial weekly said Vodafone, which holds a 45-per cent stake in Verizon Wireless, while Verizon Communications owns 55 per cent, has a healthier business and trades at a discount to Verizon shares, with a price-to-earnings multiple of nine, below Verizon's P/E of 16.

Verizon's profit could come under pressure this year because of heavy subsidies to wireless subscribers who buy the iPhone. Verizon's expected move to eventually buy out Vodafone's stake in its wireless carrier could also benefit the British company, according to the newspaper.

Verizon Wireless' superior network could lead millions of AT&T subscribers to switch to Verizon, Barron's said. But it noted that some analysts prefer AT&T shares to Verizon's because they trade at a discount and offer a higher dividend yield