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Verizon Communications Inc VZ

Morningstar Rating
$40.10 +0.17 (0.43%)
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Company Report

Verizon Has Turned the Corner on Free Cash Flow, Creating a Path to Strengthen the Balance Sheet

Verizon Communications is primarily focused on the wireless business, where it has taken steps to ensure it remains well positioned, building fiber deeper into major metro areas and acquiring huge chunks of wireless spectrum to increase network capacity and performance. We believe these resources will allow Verizon to deliver consistent financial results in the coming years. However, we expect growth will be very modest, as the wireless business is very mature, and AT&T and T-Mobile offer comparable services at similar prices. We expect Verizon and its two primary rivals will compete rationally, each attracting a similar number of customers quarter in and quarter out, diminishing Verizon’s market share lead over time.

Price vs Fair Value

VZ is trading at a 26% discount.
Price
$40.10
Fair Value
$63.00
Uncertainty
Medium
1-Star Price
$17.50
5-Star Price
$41.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

A focus on network strength over the past 15 years has put Verizon in an enviable position. Its wireless network provides the broadest coverage in the industry, and its reputation with customers is sterling.

Bears

Wireless technology is dramatically lowering the cost to build and maintain a network. Rival carriers have rapidly deployed new spectrum and technology to add coverage and capacity. Verizon’s network leadership is a thing of the past.

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News

Trading Information

Previous Close Price
$39.93
Day Range
$39.8640.21
52-Week Range
$30.1442.72
Bid/Ask
$40.02 / $40.18
Market Cap
$168.59 Bil
Volume/Avg
27,823 / 20.4 Mil

Key Statistics

Price/Earnings (Normalized)
8.51
Price/Sales
1.26
Dividend Yield (Trailing)
6.57%
Dividend Yield (Forward)
6.63%
Total Yield
6.57%

Company Profile

Wireless services account for about 70% of Verizon Communications' total service revenue and nearly all of its operating income. The firm serves about 93 million postpaid and 21 million prepaid phone customers (following the acquisition of Tracfone) via its nationwide network, making it the largest U.S. wireless carrier. Fixed-line telecom operations include local networks in the Northeast, which reach about 25 million homes and businesses and serve about 8 million broadband customers. Verizon also provides telecom services nationwide to enterprise customers, often using a mixture of its own and other carriers' networks.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
105,400

Competitors

Valuation

Metric
VZ
TMUS
CMCSA
Price/Earnings (Normalized)
8.5120.4510.62
Price/Book Value
1.843.032.03
Price/Sales
1.262.501.44
Price/Cash Flow
4.487.676.36
Price/Earnings
VZ
TMUS
CMCSA

Financial Strength

Metric
VZ
TMUS
CMCSA
Quick Ratio
0.510.680.50
Current Ratio
0.690.910.60
Interest Coverage
4.014.306.01
Quick Ratio
VZ
TMUS
CMCSA

Profitability

Metric
VZ
TMUS
CMCSA
Return on Assets (Normalized)
4.66%4.58%6.32%
Return on Equity (Normalized)
18.99%14.49%19.98%
Return on Invested Capital (Normalized)
7.89%6.73%10.60%
Return on Assets
VZ
TMUS
CMCSA
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T
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