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 30 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.
BAC had a positive operating cash flow in the past year.
Each year in the past 5 years BAC has been profitable.
In the past 5 years BAC always reported a positive cash flow from operatings.
1.2 Ratios
BAC has a better Return On Assets (4.68%) than 76.67% of its industry peers.
BAC has a better Return On Equity (17.66%) than 80.00% of its industry peers.
BAC has a Return On Invested Capital of 7.49%. This is in the better half of the industry: BAC outperforms 70.00% 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 8.11%.
The 3 year average ROIC (7.15%) for BAC is below the current ROIC(7.49%), indicating increased profibility in the last year.
| 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
The Profit Margin of BAC (13.14%) is better than 80.00% of its industry peers.
In the last couple of years the Profit Margin of BAC has declined.
Looking at the Operating Margin, with a value of 23.68%, BAC belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.
BAC's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 60.02%, BAC perfoms like the industry average, outperforming 56.67% of the companies in the same 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.
BAC has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for BAC has been increased compared to 5 years ago.
BAC has a better debt/assets ratio than last year.
2.2 Solvency
BAC has an Altman-Z score of 1.27. This is a bad value and indicates that BAC is not financially healthy and even has some risk of bankruptcy.
BAC's Altman-Z score of 1.27 is in line compared to the rest of the industry. BAC outperforms 56.67% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 7.12, BAC is in the better half of the industry, outperforming 66.67% 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 worse Debt to Equity ratio (1.20) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 7.12 | ||
| Altman-Z | 1.27 |
ROIC/WACC1.22
WACC6.14%
2.3 Liquidity
A Current Ratio of 0.61 indicates that BAC may have some problems paying its short term obligations.
BAC has a Current ratio of 0.61. This is in the lower half of the industry: BAC underperforms 73.33% of its industry peers.
A Quick Ratio of 0.58 indicates that BAC may have some problems paying its short term obligations.
With a Quick ratio value of 0.58, BAC is not doing good in the industry: 73.33% of the companies in the same industry are doing better.
| 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.
BAC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.93%.
BAC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.44% yearly.
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
Based on estimates for the next years, BAC will show a small growth in Earnings Per Share. The EPS will grow by 4.26% on average per year.
Based on estimates for the next years, BAC will show a small growth in Revenue. The Revenue will grow by 1.81% on average per year.
EPS Next Y4.9%
EPS Next 2Y4.44%
EPS Next 3Y4.42%
EPS Next 5Y4.26%
Revenue Next Year2.1%
Revenue Next 2Y2.03%
Revenue Next 3Y1.84%
Revenue Next 5Y1.81%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 9.23, 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 86.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.87, BAC is valued rather cheaply.
The Price/Forward Earnings ratio is 8.54, which indicates a very decent valuation of BAC.
Based on the Price/Forward Earnings ratio, BAC is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
BAC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.23 | ||
| Fwd PE | 8.54 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as BAC.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BAC indicates a somewhat cheap valuation: BAC is cheaper than 80.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.92 | ||
| EV/EBITDA | 6.31 |
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)1.88
PEG (5Y)N/A
EPS Next 2Y4.44%
EPS Next 3Y4.42%
5. Dividend
5.1 Amount
BAC has a Yearly Dividend Yield of 6.33%, which is a nice return.
BAC's Dividend Yield is rather good when compared to the industry average which is at 4.82. BAC pays more dividend than 86.67% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.46, BAC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.33% |
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.
BAC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP63.59%
EPS Next 2Y4.44%
EPS Next 3Y4.42%
FRA:BAC (4/23/2025, 2:49:49 PM)
37.65
+1.17 (+3.22%)
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 Cap158.50B
Analysts72.57
Price Target42.15 (11.95%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.33% |
Yearly Dividend2.35
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)-2.21%
Max Revenue beat(2)-1.92%
Revenue beat(4)0
Avg Revenue beat(4)-2.76%
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)-7.94%
PT rev (3m)-8.56%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)-0.56%
EPS NY rev (1m)0.1%
EPS NY rev (3m)-1.23%
Revenue NQ rev (1m)-0.15%
Revenue NQ rev (3m)-0.96%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.23 | ||
| Fwd PE | 8.54 | ||
| P/S | 1.33 | ||
| P/FCF | 8.92 | ||
| P/OCF | 4.79 | ||
| P/B | 1.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.31 |
EPS(TTM)4.08
EY10.84%
EPS(NY)4.41
Fwd EY11.71%
FCF(TTM)4.22
FCFY11.21%
OCF(TTM)7.87
OCFY20.89%
SpS28.3
BVpS21.07
TBVpS-18.76
PEG (NY)1.88
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 | 1.27 |
F-Score7
WACC6.14%
ROIC/WACC1.22
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 Y4.9%
EPS Next 2Y4.44%
EPS Next 3Y4.42%
EPS Next 5Y4.26%
Revenue 1Y (TTM)0.93%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.53%
Revenue Next Year2.1%
Revenue Next 2Y2.03%
Revenue Next 3Y1.84%
Revenue Next 5Y1.81%
EBIT growth 1Y5.56%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.78%
EBIT Next Year70.37%
EBIT Next 3Y21.62%
EBIT Next 5Y13.35%
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%