After a strong start to 2026, the FTSE 100 index peaked on 27 February. Then the US attacked Iran the next day, sending share prices plunging. At its 23 March low, the Footsie had lost 11.6% of its value in four weeks, before rebounding. Yet some FTSE 100 stocks have done much better in 2026, including the Vodafone Group (LSE: VOD) share price.

The FTSE 100 is up 6.3% in 2026, but Vodafone shares have easily beaten the index. Indeed, they’re at levels not seen since August 2023. What’s going well for this British telecoms provider?

Value in Vodafone

The Vodafone share price has surged from its 52-week low, after it slumped to 67.8p on 14 May 2025. Back then, Vodafone seemed an obvious recovery play to me, instead of the value trap it’s been for years. Nevertheless, I didn’t buy, because my family portfolio had already purchased this stock at 90.2p a share in December 2022.

Since 2022, Vodafone shares have been much weaker and more volatile than I’d hoped. As I write, they now stand at 114.49p, valuing this FTSE 100 firm at £26.5bn. This leaves the stock up a healthy 58.6% over one year. However, the shares have lost 14.3% of their value over five years. All the above returns exclude cash dividends — previously very generous from Vodafone.

As shareholders, my family is sitting on a paper profit of 26.9% to date. However, reinvesting our chunky dividends into buying more shares has increased our shareholding, boosting our future returns.

Turning the tanker around

In May 2024, the company announced that it would halve its yearly dividend from 2025 onwards. This slashed the payout per share from €0.09 (nine euro cents) to €0.045. This was a bitter blow for income investors holding the stock (including me).

Also, Vodafone CEO Margherita Della Valle has been selling non-core assets to raise cash. Della Valle has used this cash pile to reduce the group’s net debt, which stood at €25.9bn (£22.6bn) at end-September 2025. She has also accelerated Vodafone’s share buybacks, with €3.5bn of stock repurchased since May 2024.

What next?

On 30 December 2025, I predicted the Vodafone share price would exceed £1 ‘very soon’. My forecast soon proved correct, as the shares closed at 100.5p on 6 January. The stock has continued rising since Vodafone released its third-quarter trading update on 5 February.

What if this business keeps using its strong cash flows to pay down debt, buy back shares, and invest in growth markets? Then I suspect the shares could pass the 125p mark in 2026. Then again, that’s only 9.2% up from here, so I’m hardly sticking my neck out.

That said, what might derail Vodafone’s recent progress? I worry about growth slowing in its two key markets: Europe (112m customers) and Africa (165m customers). In particular, any setbacks in Germany (its biggest market) and the UK could hit revenues and earnings.

Finally, Vodafone’s much-reduced dividend yield now stands at 3.4% a year, but this still beats the FTSE 100’s 3% a year. Hence, I will hold tightly onto our holding, while awaiting the full-year results on 26 May!