Fear Europe? Buy Europe

Vodafone could be “one of the best – and safer – investing opportunities in this market,” Cramer said Wednesday.

The stock yields 6.7% based on the $1.30 in dividends the company expects to pay out this year, which offers great protection in this volatile market. That’s a bit less than AT&T or Verizon Communications , but Vodafone , the world’s largest wireless provider, has much better growth prospects than both of them.

Sure, Cramer can guess what you’re thinking. Buy a European stock now, in the face of a massive debt crisis? Especially one that earns 67% of its sales there? But know this: VOD is based in Britain, which means it lists in pounds not euros. And the company plans to cut $3 billion worth of Continent-based costs by 2012. If fact, the CEO has said that he’s ahead of schedule on those cuts, and Vodafone should return to revenue growth in Europe by 2011.

Regardless, though, it’s the dividend that caught Cramer’s attention. Vodafone expects to grow that payout at a 7% annual rate through 2013. So not only is this a high-yielding stock, the company is what Cramer likes to call a “serial dividend raiser.” Management wouldn’t take such bold action if the business weren’t strong, which should further help to alleviate any investor concerns about European exposure. Plus, management said it can reach that 7% dividend growth target even if the euro depreciates by up to 10% against the pound.

There’s another big piece of Vodafone’s story that investors should consider, too, namely its 45% stake in Verizon Wireless. The stake could be worth anywhere from $32 billion to $52 billion, which is significant considering VOD’s $100 billion market cap, but analysts don’t include it in their valuations of the stock. Why? Because as of now all the profits are being funneled back to pay down Vodafone’s debt to Verizon. But – that debt is expected to be paid off some time this year, Cramer said, “and then the money will likely start pouring into Vodafone’s coffers.” So much so that he thinks VOD might be a better way to play Verizon Wireless than even Verizon itself.

Speaking of which, if Verizon Wireless gets the Apple iPhone, that would make another great reason to own Vodafone. Cramer thinks millions of frustrated AT&T Wireless customers would flood to a different carrier if given the choice. And this isn’t yet priced into VOD.

And then back to that growth. Vodafone is all wireless, meaning it doesn’t suffer from the landline exposure that AT&T and Verizon have. Instead, the company does a lot of business with many of the parts of the world that skipped straight to cellular networks: Tanzania, the Congo and Kenya. There’s also business in South Africa and Egypt, too, as well as India and China.

The stock’s down 19% since April 15, giving investors a great entry point, and the dividend looks dependable.

“I think VOD’s a buy right here,” Cramer said.

Cramer’s charitable trust owns Apple.

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