I don’t write much about the telecom stocks that I’ve held for a few years now, but since I’ve promised to alert you to my stock buys and sells I’m letting you know that I’ve sold my holdings in Vodafone (VOD).

I hold Vodafone because I’ve been holding both owners of Verizon Wireless for many years — it’s just a nice cash cow that was spitting out big dividends to its owners, and I thought it was undervalued when I bought and could create substantial value when the ownership switched to one company or the other (the 50/50 ownership of the biggest US wireless operator was never a really workable relationship), and both Verizon (VZ) and Vodafone paid substantial dividends.

Well, now the final disposition of the deal has come and gone — Vodafone sold their portion of Verizon Wireless to Verizon — and I don’t see a lot to love from Vodafone in terms of earnings or dividend growth right now. Vodafone is one of the European blue chips in telecom, and it still pays a substantial dividend, but they are facing massive capital investment in order to try to replace the cash flow that Verizon Wireless provided, and I expect they’ll pay a lower dividend in the next few years. Since they’re owned largely as a blue chip dividend utility, I think that will hurt the shares.

They are well positioned in many areas of the world, and have an enviable portfolio of cable and wireless assets in Europe and valuable assets in emerging and frontier markets from Africa to Asia, but I don’t see the cash flow from those keeping up with the investment requirements — particularly as they’re on an acquisition spree (or at least, they’re trying to go on an acquisition spree) using the cash from the Verizon deal. That high-margin cash infusion from Verizon Wireless that they’ve been receiving in recent years is hard to replace.

I received both cash and Verizon shares from Vodafone as a result of the deal, and I’m keeping the Verizon shares — that’s not necessarily a huge endorsement that Verizon will go much higher from here, but I am generally loath to sell relatively stable stocks that are reasonably priced and paying high dividends that can continue to compound. I still might sell VZ, or I might sell covered calls if volatility rises ...