Verizon’s Key facts
- Verizon provides 5G, 4G LTE, Fiber Optic and Multi Edge Compute (MEC) services.
- Verizon’s mobile network is the largest wireless carrier in the United States
- Over 160 Mil by active SIM cards.
- Over 1M miles of global fiber
- 7.6M broadband connections, including 6.7 million Fios Internet connections
- 2021 revenue: $133.6 billion
Verizon’s business is divided into consumer and business segments. Verizon offers it’s business customers the same network that is used by private customers. The consumer segment brought in $95.3 billion in 2021. This corresponds to 71% of sales, while Business segment was responsible for $31 billion. The remaining 5.7% of sales come from other sources of income, such as investments in other businesses.
Verizon remains very strong Mobile Internet Provider in the USA. It has a healthy balance sheet and free cash flow, that is important for future growth. The goal for Q1 2023 is to cover 200 million C-Band (Cellular telephony). But also in the Fixed line there are expand plans in US and abroad.
A current opportunity and growth driver for Verizon is the 5G network. Verizon’s offers have already been very well received. In addition, slightly increased growth was also evident in the first quarter due to new 5G contracts.
- Gross Margin 56.97%
- Operating Margin 22.74%
- ROE 23.18 %
- P/E 8.3
- Forward PE Ratio 7.6
- Dividend Yield %6.67 (with very good payout ratio)
The main competitors are AT&T and T-Mobile.
Two main arguments for value investor to look at Verizon’s right now are Dividends and P/E ratio. PE at 8 is historically low for Verizon, which speaks volumes for the stock at current prices. For value investors, Verizon is definitely a very interesting stock with a decent dividend.
Also the industry is safe and there are still opportunities as mobile internet becomes even more relevant and new contracts are expected with 5G. On top of those points, Verizon pays a sizable dividend, currently yielding 6.67%. This dividend has been steadily increased since 2005, which also speaks for the stock.
If you’re using short term or option strategies, in October we’ve seen Verizon at $35 after, that the long drawdown trend seem to be reversed. The current price (38,55$) is still very interesting for mid and long term. However we might see Verizon touching $35 again until end of the year, but that only because of the current economy and market sentiments.