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VZ

Verizon Communications NYSE:VZ Stock Report

Last Price

US$39.52

Market Cap

US$166.0b

7D

-4.2%

1Y

-27.3%

Updated

23 Sep, 2022

Data

Company Financials +
VZ fundamental analysis
Snowflake Score
Valuation6/6
Future Growth1/6
Past Performance4/6
Financial Health3/6
Dividends5/6

VZ Stock Overview

Verizon Communications Inc., through its subsidiaries, offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.

Verizon Communications Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Verizon Communications
Historical stock prices
Current Share PriceUS$39.52
52 Week HighUS$55.51
52 Week LowUS$39.11
Beta0.34
1 Month Change-9.25%
3 Month Change-22.45%
1 Year Change-27.31%
3 Year Change-34.46%
5 Year Change-20.15%
Change since IPO38.67%

Recent News & Updates

Sep 21

Verizon: Finally At Attractive Prices

Summary Earnings continue to set new highs, which is not reflected in the company's share price. The 6.33% yield is very safe and should continue to grow by high single-digits. The company appears to be attractively valued based on its earnings, stock chart and capital allocation capabilities. Introduction For investors looking for a high but reliable dividend, with the prospect of single-digit growth going forward, this stock may be for them. Despite continuing to post decent growth, the share price of Verizon (VZ) has collapsed in recent months to a new 6-year low of $40.55. Verizon is a major American telecommunications company, currently being the second largest in the country just behind AT&T (T). The company currently has 240,000+ employees with operations spanning across thousands of cities. It's an already large company in a competitive industry, notorious for its large investment needs, but also known for its high dividend payments. While it may not be what every investor is looking for, it should catch the interest of dividend yield-seeking investors. Fundamentals Unfortunately, Verizon's revenues has been stagnant for the past 6 years, which is a bit worrying to see. It is not uncommon for such companies in the telecommunications industry to have slow growth, but it is definitely something to be aware of. The stagnant revenue puts extra pressure on the importance of margins being expandable, as in this case it is the only source of growth. However, management guided towards low single-digit growth going forward, when they held their investor presentation earlier this year. Revenue (Macrotrends.com) As seen in the image below, the net profit margin has expanded continuously since it bought Vodafone's 45% stake for $130 billion back in 2014. These annual margin expansions have been the main source of net income growth, but we have to wonder for how long this can be sustained. Net profit margin (Macrotrends.com) It has nevertheless produced an impressive amount of net income. The cash has mainly been paid out as dividends, while the rest is reinvested back into the company. The net income easily covers the dividend with a manageable payout ratio of ~50%. Given its current valuation, this results in a yield of 6.33%. Capital allocation Since the acquisition of the remaining interest of Verizon Wireless in 2014, the management of the company has been fairly good at capital allocation. The company has had a return on equity of 20%+, which is great, when you consider that equity is still growing. Although still above 20% today, it has been declining in recent years, showing signs that the rate is unsustainable. Although their return on equity has been slightly decreasing, it has still been above 20%. Since the company has paid out ~50% of earnings and no meaningful share buybacks have been made, the remaining 50% has been reinvested. This money has been invested at a return of ~22%, increasing the company's book value per share by ~11% per year. Should the company adopt a strategy of share buybacks instead of reinvesting earnings due to lower reinvestment returns, then that would also be sufficient, as the buybacks would yield ~6.3%. The expected annual returns will therefore still be in the double digits. Equity & ROE (Macrotrends.com) Valuation Given the consistent growth you might expect the stock to be valued close to a standard multiple of 15. This would most likely have been true, if it weren't for the debt that the company has. The market started assigning a lower multiple after 2014, following the 45% Verizon Wireless purchase. Before the acquisition, when the company was not so leveraged, the average multiple was ~15.4. The average multiple in the last 2 decades has been 14.66. Verizon as of their most recent quarter carries $175b in debt with only $1.8b in cash, cash equivalents and short term investments. The net debt of $173.8b is a big liability for equity investors and affects the value of the company. To avoid paying too much for the business, I suggest you add the net debt to the market value. The new $344b company now has an adjusted operating earnings multiple of ~15.5, which still seems attractive. Earnings per share with multiples (fastgraphs.com) Stock chart Quick disclaimer: A technical analysis by itself is not a good enough reason to buy a stock, but combined with the fundamentals of the company, it can greatly narrow your price target range when buying. Although Verizon's stock chart is a bit messy due to a decline in earnings per share from 2002-2012, it still shows decent areas of support. I would have assumed that prices below the 50-month moving average would be decent accumulation areas, with the ideal buying area being near the 200-month moving average.

Sep 14
Debt & the Telecom Giants: Why Spreading the Risk May be Important in an Economic Decline

Debt & the Telecom Giants: Why Spreading the Risk May be Important in an Economic Decline

AT&T Inc. (NYSE:T), T-Mobile US (NYSE:TMUS), and Verizon (NYSE:VZ) are the three key telecom operators in the US. The stocks had lackluster performance, with TMUS delivering 6.8% in the last 12 months, T experiencing a deep drop of 38.4% and VZ losing some 23.3%. In this article we will discuss the effects of debt, 5G and consumer spending on the valuations of these stocks as well as see how their fundamentals compare.

Sep 10
Verizon Communications (NYSE:VZ) Is Paying Out A Larger Dividend Than Last Year

Verizon Communications (NYSE:VZ) Is Paying Out A Larger Dividend Than Last Year

The board of Verizon Communications Inc. ( NYSE:VZ ) has announced that it will be increasing its dividend by 2.0% on...

Shareholder Returns

VZUS TelecomUS Market
7D-4.2%-4.8%-5.2%
1Y-27.3%-33.8%-23.1%

Return vs Industry: VZ exceeded the US Telecom industry which returned -33.1% over the past year.

Return vs Market: VZ underperformed the US Market which returned -21.6% over the past year.

Price Volatility

Is VZ's price volatile compared to industry and market?
VZ volatility
VZ Average Weekly Movement3.2%
Telecom Industry Average Movement6.2%
Market Average Movement6.9%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.8%

Stable Share Price: VZ is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: VZ's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1983118,400Hans Vestberghttps://www.verizon.com

Verizon Communications Inc., through its subsidiaries, offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. Its Consumer segment provides postpaid and prepaid service plans; internet access on notebook computers and tablets; wireless equipment, including smartphones and other handsets; and wireless-enabled internet devices, such as tablets, and other wireless-enabled connected devices comprising smart watches. It also provides residential fixed connectivity solutions, such as internet, video, and voice services; and sells network access to mobile virtual network operators.

Verizon Communications Fundamentals Summary

How do Verizon Communications's earnings and revenue compare to its market cap?
VZ fundamental statistics
Market CapUS$165.97b
Earnings (TTM)US$20.80b
Revenue (TTM)US$134.33b

8.0x

P/E Ratio

1.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
VZ income statement (TTM)
RevenueUS$134.33b
Cost of RevenueUS$57.29b
Gross ProfitUS$77.03b
Other ExpensesUS$56.23b
EarningsUS$20.80b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 21, 2022

Earnings per share (EPS)4.95
Gross Margin57.35%
Net Profit Margin15.48%
Debt/Equity Ratio173.1%

How did VZ perform over the long term?

See historical performance and comparison

Dividends

6.6%

Current Dividend Yield

51%

Payout Ratio

Does VZ pay a reliable dividends?

See VZ dividend history and benchmarks
When do you need to buy VZ by to receive an upcoming dividend?
Verizon Communications dividend dates
Ex Dividend DateOct 06 2022
Dividend Pay DateNov 01 2022
Days until Ex dividend11 days
Days until Dividend pay date37 days

Does VZ pay a reliable dividends?

See VZ dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is VZ undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VZ?

Other financial metrics that can be useful for relative valuation.

VZ key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.6x
Enterprise Value/EBITDA8x
PEG Ratio1.7x

Price to Earnings Ratio vs Peers

How does VZ's PE Ratio compare to its peers?

VZ PE Ratio vs Peers
The above table shows the PE ratio for VZ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average32x
T AT&T
7x1.8%US$114.1b
FYBR Frontier Communications Parent
11.5x-33.4%US$5.5b
TMUS T-Mobile US
96.6x39.1%US$165.9b
IDT IDT
12.9xn/aUS$623.5m
VZ Verizon Communications
8x4.8%US$166.0b

Price-To-Earnings vs Peers: VZ is good value based on its Price-To-Earnings Ratio (8x) compared to the peer average (32x).


Price to Earnings Ratio vs Industry

How does VZ's PE Ratio compare vs other companies in the Global Telecom Industry?

Price-To-Earnings vs Industry: VZ is good value based on its Price-To-Earnings Ratio (8x) compared to the Global Telecom industry average (16.2x)


Price to Earnings Ratio vs Fair Ratio

What is VZ's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VZ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8x
Fair PE Ratio11.4x

Price-To-Earnings vs Fair Ratio: VZ is good value based on its Price-To-Earnings Ratio (8x) compared to the estimated Fair Price-To-Earnings Ratio (11.4x).


Share Price vs Fair Value

What is the Fair Price of VZ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VZ ($39.52) is trading below our estimate of fair value ($185.97)

Significantly Below Fair Value: VZ is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Verizon Communications forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


4.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VZ's forecast earnings growth (4.8% per year) is above the savings rate (1.9%).

Earnings vs Market: VZ's earnings (4.8% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: VZ's earnings are forecast to grow, but not significantly.

Revenue vs Market: VZ's revenue (1.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: VZ's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VZ's Return on Equity is forecast to be low in 3 years time (19.8%).


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Past Performance

How has Verizon Communications performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-3.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VZ has high quality earnings.

Growing Profit Margin: VZ's current net profit margins (15.5%) are higher than last year (15%).


Past Earnings Growth Analysis

Earnings Trend: VZ's earnings have declined by 3.4% per year over the past 5 years.

Accelerating Growth: VZ's earnings growth over the past year (4%) exceeds its 5-year average (-3.4% per year).

Earnings vs Industry: VZ earnings growth over the past year (4%) exceeded the Telecom industry -34.4%.


Return on Equity

High ROE: Whilst VZ's Return on Equity (24.4%) is high, this metric is skewed due to their high level of debt.


Discover strong past performing companies

Financial Health

How is Verizon Communications's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: VZ's short term assets ($37.5B) do not cover its short term liabilities ($49.2B).

Long Term Liabilities: VZ's short term assets ($37.5B) do not cover its long term liabilities ($233.6B).


Debt to Equity History and Analysis

Debt Level: VZ's net debt to equity ratio (170.9%) is considered high.

Reducing Debt: VZ's debt to equity ratio has reduced from 439.6% to 173.1% over the past 5 years.

Debt Coverage: VZ's debt is well covered by operating cash flow (24.3%).

Interest Coverage: VZ's interest payments on its debt are well covered by EBIT (8.7x coverage).


Balance Sheet


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Dividend

What is Verizon Communications's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


6.60%

Current Dividend Yield

Upcoming Dividend Payment

TodaySep 24 2022Ex Dividend DateOct 06 2022Dividend Pay DateNov 01 202226 days from Ex DividendBuy in the next 11 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: VZ's dividend (6.6%) is higher than the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: VZ's dividend (6.6%) is in the top 25% of dividend payers in the US market (4.45%)


Stability and Growth of Payments

Stable Dividend: VZ's dividends per share have been stable in the past 10 years.

Growing Dividend: VZ's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (51.4%), VZ's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (108.4%), VZ's dividend payments are not well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

Hans Vestberg (57 yo)

4.08yrs

Tenure

US$20,342,871

Compensation

Mr. Hans E. Vestberg has been Chief Executive Officer at Verizon Communications Inc. since August 01, 2018 and served as its Executive Chairman until January 2019. He has been the Chairman of the Board at...


CEO Compensation Analysis

Compensation vs Market: Hans's total compensation ($USD20.34M) is above average for companies of similar size in the US market ($USD13.05M).

Compensation vs Earnings: Hans's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: VZ's management team is seasoned and experienced (5.3 years average tenure).


Board Members

Experienced Board: VZ's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NYSE:VZ Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
26 Apr 22SellUS$1,176,911Tamara ErwinIndividual23,647US$49.77
26 Jan 22BuyUS$998,450Hans VestbergIndividual19,000US$52.55

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 39.11% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
8.23%
The Vanguard Group, Inc.
345,733,122$13.7b4.7%0.31%
7.53%
BlackRock, Inc.
316,099,553$12.5b3.74%0.3%
3.9%
State Street Global Advisors, Inc.
163,729,827$6.5b-2.47%0.35%
1.89%
Capital Research and Management Company
79,339,997$3.1b9.8%0.21%
1.85%
Geode Capital Management, LLC
77,788,479$3.1b3.41%0.39%
1.52%
Charles Schwab Investment Management, Inc.
63,807,328$2.5b6.68%0.65%
1.13%
Northern Trust Global Investments
47,369,304$1.9b-0.47%0.37%
1.07%
Morgan Stanley, Investment Banking and Brokerage Investments
44,959,538$1.8b2.28%0.34%
0.97%
J.P. Morgan Asset Management, Inc.
40,553,251$1.6b51.5%0.29%
0.91%
BNY Mellon Asset Management
38,362,927$1.5b5.22%0.33%
0.91%
Managed Account Advisors LLC
38,171,139$1.5b33.68%0.41%
0.89%
FMR LLC
37,428,792$1.5b16.08%0.13%
0.86%
Norges Bank Investment Management
36,276,315$1.4b0%0.19%
0.84%
UBS Asset Management
35,309,591$1.4b2.05%0.26%
0.78%
Dimensional Fund Advisors LP
32,681,915$1.3b-1.59%0.31%
0.75%
Legal & General Investment Management Limited
31,576,105$1.2b3.01%0.36%
0.74%
Wellington Management Group LLP
30,976,360$1.2b-5.17%0.22%
0.66%
Columbia Management Investment Advisers, LLC
27,656,591$1.1b5.95%0.32%
0.65%
California Public Employees' Retirement System
27,506,005$1.1b-1.23%0.99%
0.58%
Wells Fargo & Company, Securities and Brokerage Investments
24,359,806$962.7m1.64%0.41%
0.58%
Merrill Lynch & Co. Inc., Banking Investments
24,253,990$958.5m4.48%0.48%
0.55%
Eaton Vance Management
23,058,627$911.3m0.3%0.34%
0.47%
Invesco Ltd.
19,761,609$781.0m68.98%0.26%
0.43%
Swiss National Bank, Asset Management Arm
18,209,501$719.6m1.55%0.46%
0.42%
Deutsche Asset & Wealth Management
17,720,185$700.3m31.95%0.29%

Company Information

Verizon Communications Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Verizon Communications Inc.
  • Ticker: VZ
  • Exchange: NYSE
  • Founded: 1983
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Implied Market Cap: US$165.973b
  • Shares outstanding: 4.20b
  • Website: https://www.verizon.com

Number of Employees


Location

  • Verizon Communications Inc.
  • 1095 Avenue of the Americas
  • New York
  • New York
  • 10036
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VZNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1983
VZ *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNNov 1983
0Q1SLSE (London Stock Exchange)YesCommon StockGBUSDNov 1983
VZSWX (SIX Swiss Exchange)YesCommon StockCHCHFNov 1983
BACDB (Deutsche Boerse AG)YesCommon StockDEEURNov 1983
BACXTRA (XETRA Trading Platform)YesCommon StockDEEURNov 1983
VZSNSE (Santiago Stock Exchange)YesCommon StockCLUSDNov 1983
VZETLX (Eurotlx)YesCommon StockITEURNov 1983
VZWBAG (Wiener Boerse AG)YesCommon StockATEURNov 1983
VZBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDNov 1983
VERIZENXTBR (Euronext Brussels)YesCommon StockBEUSDNov 1983
BACBUL (Bulgaria Stock Exchange)YesCommon StockBGEURNov 1983
VZ_KZKAS (Kazakhstan Stock Exchange)YesCommon StockKZUSDNov 1983
VZBASE (Buenos Aires Stock Exchange)CEDEAR REP 1/2 COM (USD)ARARSFeb 2011
VZDBASE (Buenos Aires Stock Exchange)CEDEAR REP 1/2 COM (USD)ARUSDFeb 2011
VERZ34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 6 REP 1 COMBRBRLAug 2012

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/23 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.