Verizon Communications (NYSE: VZ)
Quality Value Investing Research Report | Updated Coverage | January 2024
Summary:
Verizon Communications is a counterintuitive defensive play in the 5G and IoT sectors, with an appealing dividend payout.
The company has a narrow economic moat but a leveraged balance sheet, resulting in average enterprise downside risks.
Shareholder yields outperform the intermediate Treasury benchmark, and valuation multiples suggest discounted shares with low stock price downside risks.
However, in this updated report, one week ahead of Verizon’s 2023 Q4 and full-year earnings release, QVI is placing the stock on watch for a possible sale from our family portfolio.
When referencing this research report, access your Quality Value Investing (QVI) Glossary of Investing Terms and Metric Targets. Unless noted, all data presented is sourced from Seeking Alpha Premium as of the market close on January 16, 2024, and intended for illustration only.
The 43 holdings in the QVI Real-Time Stock Picks portfolio have collectively achieved alpha for 15 years by focusing research and analysis on a company’s current wealth and its share price’s present value. In other words, just the facts without unreliable predictive analysis typical of the buy side or the business modeling overkill of the sell side Wall Street analysts.
In this updated QVI Research Report, we’ll look at the Concentrated Real-Time Stock Picks communications services sector holding Verizon Communications, Inc. to see if it continues to meet Quality Value Investing’s active portfolio inclusion criteria based on our checklist analysis of the business’s current wealth and its stock’s present value.
Verizon: Company Current Wealth
To uncover the current wealth of the company, QVI defines the value proposition, measures returns on management, and assesses enterprise downside risks.
Value Proposition
QVI Research Report’s value proposition section provides a brief synopsis of the company’s business model, major-exchange listing, stock symbol, market capitalization, and dividend-paying status. In addition, it defines the competitive advantages of a company’s products or services to its customers compared to the industry, including the stock’s historical performance vs. the sector and market.
Verizon Communications VZ 0.00%↑ is a dividend-paying large-cap stock in the communications services sector’s integrated telecommunications services industry. VZ was added to the QVI Concentrated Stock Picks on April 8, 2021, at a split and dividend-adjusted $48.89 a share.
Verizon Communications, Inc., through its subsidiaries, provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group and Verizon Business Group.
The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access [FWA] broadband through its wireless networks. It also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.
The Business segment provides wireless and wireline communications services and products, including data, video, conferencing, corporate networking, security and managed network, local and long-distance voice, network access, and various IoT services and products, as well as FWA broadband through its wireless networks. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000.
Verizon was incorporated in 1983 and is headquartered in New York, New York, USA.
QVI’s value proposition elevator pitch for Verizon:
Verizon is a counterintuitive defensive play in the burgeoning fifth-generation mobile network or 5G and the disruptive Internet of Things or IoT. Its forward dividend yield is appealing to income-focused investors.
Due Diligence Resources
For a more in-depth analysis of the all-important value proposition, visit Verizon Communications’s investor relations webpage and its most recent Form 10-K Annual Report submitted to the US Securities and Exchange Commission or SEC.
Performance vs. Sector and Market
The chart below illustrates Verizon Communications’s performance against the Communications Services Select Sector SPDR® Fund ETF (NYSE: XLC) and the SPDR® S&P 500 ETF Trust (NYSE: SPY) since being added to the QVI Concentrated Stock Picks on April 8, 2021. VZ has underperformed its sector and broader market during QVI’s three years of coverage.
QVI’s value proposition rating for Verizon Communications: Neutral.
Next, we’ll look at the company’s returns on management and enterprise downsize risks, the share price’s present value, and the investment thesis, each exclusive to Quality Value Investing’s premium (paying) subscribers.