Vodafone and Shell offer opportunities for income investors

As Royal Dutch Shell quadruple Q4 profits, Graham Spooner, investment adviser at The Share Centre, comments on what this means to investors.

"Higher energy prices, an increase in production and cost-cutting all played a part in Shell reporting profits of $18.6bn for 2010 - almost twice as high as in 2009. Earnings for the last three months of 2010 rose to $5.7bn compared to $1.2bn the previous year.

"2010 saw the oil company make $7bn of acquisitions and invest $3bn in exploration, as well as a number of major projects from Qatar to Brazil started producing oil and gas, lifting output and revenue, and ensuring growth.

"Shell is our sector pick and is viewed as a core holding for any blue chip income geared portfolio. Income seekers should note the company offer a healthy dividend of 42 cents per share for Q4 and this is likely to remain the same for the Q1 of this year."

Commenting on Vodafone's positive trading statement, Spooner added: "Figures released by Vodafone this morning confirm the strength of the mobile phone giant's global presence - especially in emerging markets.

"Revenue rose 3.5% to £11.9bn during the three months ended 31 December 2010, driven by strong growth in India and parts of Europe. Service revenue was a driver for Vodafone; in India it rose by 16.7%, Turkey delivered a 31.7% rise and the UK saw a 7% increase. However, Spain saw service revenue fall by over 7%.

"Customer growth and higher data revenue, from smartphone sales, led to Verizon Wireless in the US also seeing 7% rise.

 "Due to its promise of global growth and the company's pledge to increase its annual dividend by at least 7% for the next three years, we continue to list Vodafone as a ‘buy'.

"Investors seeking income should be happy to hold onto this stock and consider increasing their holding. The potential is strong and Vodafone's exposure to emerging markets is an attractive prospect for investors."