VERIZON COMMUNICATIONS INC (BAC.DE) Stock Fundamental Analysis
FRA:BAC - Deutsche Boerse Ag - US92343V1044 - Common Stock - Currency: EUR
Taking everything into account, BAC scores 5 out of 10 in our fundamental rating. BAC was compared to 29 industry peers in the Diversified Telecommunication Services industry. While BAC has a great profitability rating, there are quite some concerns on its financial health. BAC has a correct valuation and a medium growth rate. Finally BAC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
BAC had positive earnings in the past year.
In the past year BAC had a positive cash flow from operations.
BAC had positive earnings in each of the past 5 years.
In the past 5 years BAC always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of BAC (4.55%) is better than 73.33% of its industry peers.
BAC's Return On Equity of 17.64% is fine compared to the rest of the industry. BAC outperforms 76.67% of its industry peers.
BAC has a better Return On Invested Capital (7.40%) than 66.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BAC is in line with the industry average of 7.55%.
The last Return On Invested Capital (7.40%) for BAC is above the 3 year average (7.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.55% | ||
| ROE | 17.64% | ||
| ROIC | 7.4% |
ROA(3y)4.4%
ROA(5y)4.97%
ROE(3y)17.84%
ROE(5y)21.35%
ROIC(3y)7.15%
ROIC(5y)7.43%
1.3 Margins
The Profit Margin of BAC (12.99%) is better than 76.67% of its industry peers.
In the last couple of years the Profit Margin of BAC has declined.
BAC has a Operating Margin of 23.53%. This is amongst the best in the industry. BAC outperforms 83.33% of its industry peers.
BAC's Operating Margin has been stable in the last couple of years.
BAC has a Gross Margin (60.01%) which is comparable to the rest of the industry.
BAC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.53% | ||
| PM (TTM) | 12.99% | ||
| GM | 60.01% |
OM growth 3Y-0.77%
OM growth 5Y0%
PM growth 3Y-7.69%
PM growth 5Y-2.33%
GM growth 3Y1.22%
GM growth 5Y0.51%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so BAC is still creating some value.
The number of shares outstanding for BAC remains at a similar level compared to 1 year ago.
The number of shares outstanding for BAC has been increased compared to 5 years ago.
The debt/assets ratio for BAC has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.28, we must say that BAC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of BAC (1.28) is comparable to the rest of the industry.
BAC has a debt to FCF ratio of 7.61. This is a slightly negative value and a sign of low solvency as BAC would need 7.61 years to pay back of all of its debts.
BAC has a Debt to FCF ratio of 7.61. This is comparable to the rest of the industry: BAC outperforms 60.00% of its industry peers.
A Debt/Equity ratio of 1.22 is on the high side and indicates that BAC has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.22, BAC is doing worse than 63.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 7.61 | ||
| Altman-Z | 1.28 |
ROIC/WACC1.11
WACC6.69%
2.3 Liquidity
BAC has a Current Ratio of 0.63. This is a bad value and indicates that BAC is not financially healthy enough and could expect problems in meeting its short term obligations.
BAC has a worse Current ratio (0.63) than 70.00% of its industry peers.
BAC has a Quick Ratio of 0.63. This is a bad value and indicates that BAC is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.59, BAC is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
The earnings per share for BAC have decreased by -2.55% in the last year.
BAC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.93% yearly.
BAC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.61%.
The Revenue has been growing slightly by 0.44% on average over the past years.
EPS 1Y (TTM)-2.55%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%1.85%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.57%
3.2 Future
The Earnings Per Share is expected to grow by 4.37% on average over the next years.
BAC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.63% yearly.
EPS Next Y5.02%
EPS Next 2Y4.68%
EPS Next 3Y4.73%
EPS Next 5Y4.37%
Revenue Next Year1.85%
Revenue Next 2Y1.86%
Revenue Next 3Y1.94%
Revenue Next 5Y1.63%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.36, the valuation of BAC can be described as very reasonable.
Based on the Price/Earnings ratio, BAC is valued a bit cheaper than 80.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.35. BAC is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 8.92 indicates a reasonable valuation of BAC.
BAC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BAC is cheaper than 76.67% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, BAC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.36 | ||
| Fwd PE | 8.92 |
4.2 Price Multiples
BAC's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, BAC is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.57 | ||
| EV/EBITDA | 6.7 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BAC does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of BAC may justify a higher PE ratio.
PEG (NY)1.86
PEG (5Y)N/A
EPS Next 2Y4.68%
EPS Next 3Y4.73%
5. Dividend
5.1 Amount
BAC has a Yearly Dividend Yield of 6.13%, which is a nice return.
BAC's Dividend Yield is rather good when compared to the industry average which is at 5.01. BAC pays more dividend than 83.33% of the companies in the same industry.
BAC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.13% |
5.2 History
The dividend of BAC has a limited annual growth rate of 1.99%.
Dividend Growth(5Y)1.99%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
64.26% of the earnings are spent on dividend by BAC. This is not a sustainable payout ratio.
The dividend of BAC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP64.26%
EPS Next 2Y4.68%
EPS Next 3Y4.73%
FRA:BAC (3/6/2025, 12:19:56 PM)
39.61
-0.41 (-1.02%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners65.92%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap166.75B
Analysts73.71
Price Target45.79 (15.6%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.13% |
Yearly Dividend2.46
Dividend Growth(5Y)1.99%
DP64.26%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.13%
Min EPS beat(2)-2.47%
Max EPS beat(2)-1.78%
EPS beat(4)0
Avg EPS beat(4)-1.8%
Min EPS beat(4)-2.67%
Max EPS beat(4)-0.26%
EPS beat(8)2
Avg EPS beat(8)-1.36%
EPS beat(12)2
Avg EPS beat(12)-1.68%
EPS beat(16)4
Avg EPS beat(16)-1.23%
Revenue beat(2)0
Avg Revenue beat(2)-2.56%
Min Revenue beat(2)-3.21%
Max Revenue beat(2)-1.92%
Revenue beat(4)0
Avg Revenue beat(4)-3.12%
Min Revenue beat(4)-3.7%
Max Revenue beat(4)-1.92%
Revenue beat(8)0
Avg Revenue beat(8)-3.29%
Revenue beat(12)0
Avg Revenue beat(12)-3%
Revenue beat(16)1
Avg Revenue beat(16)-2.75%
PT rev (1m)2.39%
PT rev (3m)1.77%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.45%
EPS NY rev (1m)0.24%
EPS NY rev (3m)-1.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.49%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.36 | ||
| Fwd PE | 8.92 | ||
| P/S | 1.34 | ||
| P/FCF | 9.57 | ||
| P/OCF | 4.9 | ||
| P/B | 1.82 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.7 |
EPS(TTM)4.23
EY10.68%
EPS(NY)4.44
Fwd EY11.21%
FCF(TTM)4.14
FCFY10.45%
OCF(TTM)8.08
OCFY20.39%
SpS29.49
BVpS21.71
TBVpS-19.99
PEG (NY)1.86
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.55% | ||
| ROE | 17.64% | ||
| ROCE | 9.91% | ||
| ROIC | 7.4% | ||
| ROICexc | 7.5% | ||
| ROICexgc | 18.92% | ||
| OM | 23.53% | ||
| PM (TTM) | 12.99% | ||
| GM | 60.01% | ||
| FCFM | 14.04% |
ROA(3y)4.4%
ROA(5y)4.97%
ROE(3y)17.84%
ROE(5y)21.35%
ROIC(3y)7.15%
ROIC(5y)7.43%
ROICexc(3y)7.22%
ROICexc(5y)7.63%
ROICexgc(3y)17.6%
ROICexgc(5y)17.93%
ROCE(3y)9.58%
ROCE(5y)9.96%
ROICexcg growth 3Y0.43%
ROICexcg growth 5Y-1.19%
ROICexc growth 3Y-0.4%
ROICexc growth 5Y-4.59%
OM growth 3Y-0.77%
OM growth 5Y0%
PM growth 3Y-7.69%
PM growth 5Y-2.33%
GM growth 3Y1.22%
GM growth 5Y0.51%
F-Score6
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 7.61 | ||
| Debt/EBITDA | 2.45 | ||
| Cap/Depr | 100.55% | ||
| Cap/Sales | 13.35% | ||
| Interest Coverage | 5.76 | ||
| Cash Conversion | 74.41% | ||
| Profit Quality | 108.09% | ||
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 1.28 |
F-Score6
WACC6.69%
ROIC/WACC1.11
Cap/Depr(3y)132.1%
Cap/Depr(5y)187.34%
Cap/Sales(3y)17.07%
Cap/Sales(5y)23.57%
Profit Quality(3y)89.4%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.55%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%1.85%
EPS Next Y5.02%
EPS Next 2Y4.68%
EPS Next 3Y4.73%
EPS Next 5Y4.37%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.57%
Revenue Next Year1.85%
Revenue Next 2Y1.86%
Revenue Next 3Y1.94%
Revenue Next 5Y1.63%
EBIT growth 1Y8.61%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.44%
EBIT Next Year70.64%
EBIT Next 3Y21.39%
EBIT Next 5Y13.6%
FCF growth 1Y46.55%
FCF growth 3YN/A
FCF growth 5Y2.28%
OCF growth 1Y-1.5%
OCF growth 3Y-2.27%
OCF growth 5Y0.64%