Investors keen on healthy dividends are naturally drawn to the cash generative and defensive telecoms sector. Industry heavyweights MTN and Vodacom both offer attractive dividend yields and rand-hedge benefits, but the stocks have lost ground so far in 2017 amid a difficult trading environment and regulatory uncertainties at home and abroad. Picking between the two ultimately comes down to relative valuations — a metric by which Vodacom has the edge. After reaching a low of R110.41 in mid-June as the US$1bn fine in Nigeria weighed on profits and sentiment, MTN’s share price has recovered somewhat. On November 13, it had risen to R124.17. That means the group’s shares are now trading at a fairly demanding forward price:earnings (p:e) ratio of 18.3, which partly reflects that "a lot of hope is priced in", according to Imtiaz Suliman, portfolio manager at Sentio Capital.On the other hand, Vodacom’s share price has fallen to R147.34 since parent company Vodafone sold a portion of its sh...

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