VERIZON COMMUNICATIONS INC (BAC.DE) Stock Fundamental Analysis
FRA:BAC - Deutsche Boerse Ag - US92343V1044 - Common Stock - Currency: EUR
We assign a fundamental rating of 5 out of 10 to BAC. BAC was compared to 27 industry peers in the Diversified Telecommunication Services industry. BAC scores excellent on profitability, but there are concerns on its financial health. BAC has a decent growth rate and is not valued too expensively. 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.
In the past 5 years BAC has always been profitable.
Each year in the past 5 years BAC had a positive operating cash flow.
1.2 Ratios
BAC has a better Return On Assets (4.68%) than 74.07% of its industry peers.
Looking at the Return On Equity, with a value of 17.66%, BAC is in the better half of the industry, outperforming 74.07% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.49%, BAC is doing good in the industry, outperforming 66.67% of the companies in the same industry.
BAC had an Average Return On Invested Capital over the past 3 years of 7.15%. This is in line with the industry average of 7.76%.
The last Return On Invested Capital (7.49%) for BAC is above the 3 year average (7.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.68% | ||
| ROE | 17.66% | ||
| ROIC | 7.49% |
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
Looking at the Profit Margin, with a value of 13.14%, BAC belongs to the top of the industry, outperforming 81.48% of the companies in the same industry.
BAC's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 23.68%, BAC belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
BAC's Operating Margin has been stable in the last couple of years.
BAC has a Gross Margin (60.02%) 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 | 23.68% | ||
| PM (TTM) | 13.14% | ||
| GM | 60.02% |
OM growth 3Y-0.77%
OM growth 5Y0.34%
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.
Compared to 1 year ago, BAC has about the same amount of shares outstanding.
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
BAC has an Altman-Z score of 1.29. This is a bad value and indicates that BAC is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.29, BAC perfoms like the industry average, outperforming 59.26% of the companies in the same industry.
BAC has a debt to FCF ratio of 7.12. This is a slightly negative value and a sign of low solvency as BAC would need 7.12 years to pay back of all of its debts.
With a Debt to FCF ratio value of 7.12, BAC perfoms like the industry average, outperforming 51.85% of the companies in the same industry.
BAC has a Debt/Equity ratio of 1.20. This is a high value indicating a heavy dependency on external financing.
BAC has a Debt to Equity ratio of 1.20. This is in the lower half of the industry: BAC underperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 7.12 | ||
| Altman-Z | 1.29 |
ROIC/WACC1.25
WACC5.98%
2.3 Liquidity
BAC has a Current Ratio of 0.61. 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's Current ratio of 0.61 is on the low side compared to the rest of the industry. BAC is outperformed by 81.48% of its industry peers.
A Quick Ratio of 0.58 indicates that BAC may have some problems paying its short term obligations.
The Quick ratio of BAC (0.58) is worse than 81.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The earnings per share for BAC have decreased by -0.64% 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.
The Revenue has been growing slightly by 0.93% in the past year.
The Revenue has been growing slightly by 0.44% on average over the past years.
EPS 1Y (TTM)-0.64%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%3.48%
Revenue 1Y (TTM)0.93%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.53%
3.2 Future
BAC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.94% yearly.
The Revenue is expected to grow by 1.83% on average over the next years.
EPS Next Y5.09%
EPS Next 2Y4.08%
EPS Next 3Y4.07%
EPS Next 5Y4.94%
Revenue Next Year1.98%
Revenue Next 2Y1.86%
Revenue Next 3Y1.7%
Revenue Next 5Y1.83%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 9.44, the valuation of BAC can be described as reasonable.
BAC's Price/Earnings ratio is rather cheap when compared to the industry. BAC is cheaper than 85.19% of the companies in the same industry.
BAC is valuated cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 8.78 indicates a reasonable valuation of BAC.
Based on the Price/Forward Earnings ratio, BAC is valued cheaply inside the industry as 81.48% of the companies are valued more expensively.
BAC is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.44 | ||
| Fwd PE | 8.78 |
4.2 Price Multiples
BAC's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BAC indicates a somewhat cheap valuation: BAC is cheaper than 70.37% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.12 | ||
| EV/EBITDA | 6.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of BAC may justify a higher PE ratio.
PEG (NY)1.85
PEG (5Y)N/A
EPS Next 2Y4.08%
EPS Next 3Y4.07%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.22%, BAC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.66, BAC pays a better dividend. On top of this BAC pays more dividend than 92.59% of the companies listed in the same industry.
BAC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.22% |
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
BAC pays out 63.59% of its income as dividend. This is not a sustainable payout ratio.
The dividend of BAC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP63.59%
EPS Next 2Y4.08%
EPS Next 3Y4.07%
FRA:BAC (7/4/2025, 7:00:00 PM)
37.09
+0.1 (+0.26%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners67.4%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap156.37B
Analysts73.71
Price Target42.32 (14.1%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.22% |
Yearly Dividend2.27
Dividend Growth(5Y)1.99%
DP63.59%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.9%
Min EPS beat(2)-2.47%
Max EPS beat(2)0.67%
EPS beat(4)1
Avg EPS beat(4)-1.56%
Min EPS beat(4)-2.67%
Max EPS beat(4)0.67%
EPS beat(8)3
Avg EPS beat(8)-0.94%
EPS beat(12)3
Avg EPS beat(12)-1.41%
EPS beat(16)5
Avg EPS beat(16)-1.1%
Revenue beat(2)0
Avg Revenue beat(2)-2.06%
Min Revenue beat(2)-2.2%
Max Revenue beat(2)-1.92%
Revenue beat(4)0
Avg Revenue beat(4)-2.75%
Min Revenue beat(4)-3.7%
Max Revenue beat(4)-1.92%
Revenue beat(8)0
Avg Revenue beat(8)-2.96%
Revenue beat(12)0
Avg Revenue beat(12)-2.94%
Revenue beat(16)1
Avg Revenue beat(16)-2.78%
PT rev (1m)-1.2%
PT rev (3m)-4.75%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-0.18%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)0.28%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)0.37%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.44 | ||
| Fwd PE | 8.78 | ||
| P/S | 1.36 | ||
| P/FCF | 9.12 | ||
| P/OCF | 4.89 | ||
| P/B | 1.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.5 |
EPS(TTM)3.93
EY10.6%
EPS(NY)4.23
Fwd EY11.39%
FCF(TTM)4.07
FCFY10.97%
OCF(TTM)7.58
OCFY20.44%
SpS27.27
BVpS20.3
TBVpS-18.08
PEG (NY)1.85
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.68% | ||
| ROE | 17.66% | ||
| ROCE | 10.03% | ||
| ROIC | 7.49% | ||
| ROICexc | 7.54% | ||
| ROICexgc | 18.89% | ||
| OM | 23.68% | ||
| PM (TTM) | 13.14% | ||
| GM | 60.02% | ||
| FCFM | 14.91% |
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-0.86%
ROICexc growth 3Y-0.4%
ROICexc growth 5Y-4.26%
OM growth 3Y-0.77%
OM growth 5Y0.34%
PM growth 3Y-7.69%
PM growth 5Y-2.33%
GM growth 3Y1.22%
GM growth 5Y0.51%
F-Score7
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 7.12 | ||
| Debt/EBITDA | 2.42 | ||
| Cap/Depr | 96.72% | ||
| Cap/Sales | 12.88% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.13% | ||
| Profit Quality | 113.47% | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 1.29 |
F-Score7
WACC5.98%
ROIC/WACC1.25
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)-0.64%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%3.48%
EPS Next Y5.09%
EPS Next 2Y4.08%
EPS Next 3Y4.07%
EPS Next 5Y4.94%
Revenue 1Y (TTM)0.93%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.53%
Revenue Next Year1.98%
Revenue Next 2Y1.86%
Revenue Next 3Y1.7%
Revenue Next 5Y1.83%
EBIT growth 1Y5.56%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.78%
EBIT Next Year70.91%
EBIT Next 3Y21.43%
EBIT Next 5Y13.57%
FCF growth 1Y55.55%
FCF growth 3YN/A
FCF growth 5Y2.28%
OCF growth 1Y-2.59%
OCF growth 3Y-2.27%
OCF growth 5Y0.64%