VERIZON COMMUNICATIONS INC (VZ) Stock Fundamental Analysis
NYSE:VZ - New York Stock Exchange, Inc. - US92343V1044 - Common Stock - Currency: USD
Taking everything into account, VZ scores 6 out of 10 in our fundamental rating. VZ was compared to 31 industry peers in the Diversified Telecommunication Services industry. VZ scores excellent on profitability, but there are concerns on its financial health. VZ may be a bit undervalued, certainly considering the very reasonable score on growth Finally VZ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
VZ had positive earnings in the past year.
VZ had a positive operating cash flow in the past year.
Each year in the past 5 years VZ has been profitable.
Each year in the past 5 years VZ had a positive operating cash flow.
1.2 Ratios
VZ has a Return On Assets of 4.55%. This is amongst the best in the industry. VZ outperforms 83.87% of its industry peers.
VZ has a better Return On Equity (17.64%) than 93.55% of its industry peers.
VZ has a better Return On Invested Capital (7.40%) than 87.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VZ is in line with the industry average of 5.65%.
The last Return On Invested Capital (7.40%) for VZ is above the 3 year average (6.92%), 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)6.92%
ROIC(5y)7.29%
1.3 Margins
VZ's Profit Margin of 12.99% is amongst the best of the industry. VZ outperforms 87.10% of its industry peers.
VZ's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 23.53%, VZ belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
VZ's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 60.01%, VZ is doing good in the industry, outperforming 61.29% of the companies in the same industry.
VZ'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-3.01%
OM growth 5Y-1.37%
PM growth 3Y-7.69%
PM growth 5Y-2.33%
GM growth 3Y1.14%
GM growth 5Y0.46%
2. Health
2.1 Basic Checks
VZ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, VZ has about the same amount of shares outstanding.
The number of shares outstanding for VZ has been increased compared to 5 years ago.
VZ has a better debt/assets ratio than last year.
2.2 Solvency
VZ has an Altman-Z score of 1.22. This is a bad value and indicates that VZ is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of VZ (1.22) is better than 70.97% of its industry peers.
The Debt to FCF ratio of VZ is 7.61, which is on the high side as it means it would take VZ, 7.61 years of fcf income to pay off all of its debts.
VZ has a Debt to FCF ratio of 7.61. This is in the better half of the industry: VZ outperforms 67.74% of its industry peers.
VZ has a Debt/Equity ratio of 1.22. This is a high value indicating a heavy dependency on external financing.
VZ has a Debt to Equity ratio (1.22) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 7.61 | ||
| Altman-Z | 1.22 |
ROIC/WACC1.11
WACC6.67%
2.3 Liquidity
A Current Ratio of 0.63 indicates that VZ may have some problems paying its short term obligations.
VZ has a Current ratio of 0.63. This is amonst the worse of the industry: VZ underperforms 90.32% of its industry peers.
A Quick Ratio of 0.59 indicates that VZ may have some problems paying its short term obligations.
With a Quick ratio value of 0.59, VZ is not doing good in the industry: 93.55% 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 VZ have decreased by -2.55% in the last year.
The Earnings Per Share has been decreasing by -0.93% on average over the past years.
The Revenue has been growing slightly by 0.61% in the past year.
VZ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.44% yearly.
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 4.60% on average over the next years.
VZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.67% yearly.
EPS Next Y6.21%
EPS Next 2Y4.92%
EPS Next 3Y5.01%
EPS Next 5Y4.6%
Revenue Next Year1.8%
Revenue Next 2Y1.76%
Revenue Next 3Y1.97%
Revenue Next 5Y1.67%
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
VZ is valuated reasonably with a Price/Earnings ratio of 8.61.
Based on the Price/Earnings ratio, VZ is valued cheaper than 96.77% of the companies in the same industry.
VZ is valuated cheaply when we compare the Price/Earnings ratio to 28.58, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 8.11 indicates a reasonable valuation of VZ.
100.00% of the companies in the same industry are more expensive than VZ, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.47. VZ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.61 | ||
| Fwd PE | 8.11 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VZ indicates a rather cheap valuation: VZ is cheaper than 80.65% of the companies listed in the same industry.
VZ's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.8 | ||
| EV/EBITDA | 6.17 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
VZ has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.39
PEG (5Y)N/A
EPS Next 2Y4.92%
EPS Next 3Y5.01%
5. Dividend
5.1 Amount
VZ has a Yearly Dividend Yield of 6.92%, which is a nice return.
VZ's Dividend Yield is rather good when compared to the industry average which is at 5.32. VZ pays more dividend than 87.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, VZ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.92% |
5.2 History
The dividend of VZ has a limited annual growth rate of 1.99%.
VZ has been paying a dividend for at least 10 years, so it has a reliable track record.
VZ has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.99%
Div Incr Years20
Div Non Decr Years24
5.3 Sustainability
64.26% of the earnings are spent on dividend by VZ. This is not a sustainable payout ratio.
VZ's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP64.26%
EPS Next 2Y4.92%
EPS Next 3Y5.01%
VERIZON COMMUNICATIONS INC
NYSE:VZ (1/24/2025, 8:14:57 PM)
After market: 39.54 0 (0%)39.54
+0.36 (+0.92%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners64.32%
Inst Owner Change-0.02%
Ins Owners0.03%
Ins Owner Change0%
Market Cap166.45B
Analysts72.57
Price Target47.63 (20.46%)
Short Float %1.36%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.92% |
Yearly Dividend2.67
Dividend Growth(5Y)1.99%
DP64.26%
Div Incr Years20
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.72%
Min EPS beat(2)-3.67%
Max EPS beat(2)-1.78%
EPS beat(4)0
Avg EPS beat(4)-2.09%
Min EPS beat(4)-3.67%
Max EPS beat(4)-0.26%
EPS beat(8)2
Avg EPS beat(8)-1.5%
EPS beat(12)2
Avg EPS beat(12)-1.78%
EPS beat(16)4
Avg EPS beat(16)-1.3%
Revenue beat(2)0
Avg Revenue beat(2)-2.8%
Min Revenue beat(2)-3.21%
Max Revenue beat(2)-2.39%
Revenue beat(4)0
Avg Revenue beat(4)-3.24%
Min Revenue beat(4)-3.7%
Max Revenue beat(4)-2.39%
Revenue beat(8)0
Avg Revenue beat(8)-3.35%
Revenue beat(12)0
Avg Revenue beat(12)-3.04%
Revenue beat(16)1
Avg Revenue beat(16)-2.78%
PT rev (1m)0.42%
PT rev (3m)0.15%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.46%
EPS NY rev (1m)0%
EPS NY rev (3m)1.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.58%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.61 | ||
| Fwd PE | 8.11 | ||
| P/S | 1.23 | ||
| P/FCF | 8.8 | ||
| P/OCF | 4.51 | ||
| P/B | 1.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.17 |
EPS(TTM)4.59
EY11.61%
EPS(NY)4.87
Fwd EY12.33%
FCF(TTM)4.49
FCFY11.37%
OCF(TTM)8.77
OCFY22.18%
SpS32.02
BVpS23.57
TBVpS-21.7
PEG (NY)1.39
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)6.92%
ROIC(5y)7.29%
ROICexc(3y)6.99%
ROICexc(5y)7.49%
ROICexgc(3y)17.02%
ROICexgc(5y)17.58%
ROCE(3y)9.27%
ROCE(5y)9.77%
ROICexcg growth 3Y-1.84%
ROICexcg growth 5Y-2.54%
ROICexc growth 3Y-2.65%
ROICexc growth 5Y-5.89%
OM growth 3Y-3.01%
OM growth 5Y-1.37%
PM growth 3Y-7.69%
PM growth 5Y-2.33%
GM growth 3Y1.14%
GM growth 5Y0.46%
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 | 250 | ||
| Cash Conversion | 74.41% | ||
| Profit Quality | 108.09% | ||
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 1.22 |
F-Score6
WACC6.67%
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 Y6.21%
EPS Next 2Y4.92%
EPS Next 3Y5.01%
EPS Next 5Y4.6%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.57%
Revenue Next Year1.8%
Revenue Next 2Y1.76%
Revenue Next 3Y1.97%
Revenue Next 5Y1.67%
EBIT growth 1Y8.61%
EBIT growth 3Y-2.73%
EBIT growth 5Y-0.93%
EBIT Next Year70.2%
EBIT Next 3Y21.27%
EBIT Next 5Y13.64%
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%