VERIZON COMMUNICATIONS INC (VZ)
US92343V1044 - Common Stock
Overall VZ gets a fundamental rating of 5 out of 10. We evaluated VZ against 33 industry peers in the Diversified Telecommunication Services industry. While VZ has a great profitability rating, there are quite some concerns on its financial health. VZ is not valued too expensively and it also shows a decent growth rate. VZ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
VZ had positive earnings in the past year.
In the past year VZ had a positive cash flow from operations.
Each year in the past 5 years VZ has been profitable.
In the past 5 years VZ always reported a positive cash flow from operatings.
1.2 Ratios
VZ has a Return On Assets of 2.57%. This is in the better half of the industry: VZ outperforms 69.70% of its industry peers.
VZ's Return On Equity of 10.17% is fine compared to the rest of the industry. VZ outperforms 72.73% of its industry peers.
VZ has a Return On Invested Capital of 7.25%. This is amongst the best in the industry. VZ outperforms 87.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for VZ is in line with the industry average of 6.11%.
The 3 year average ROIC (7.07%) for VZ is below the current ROIC(7.25%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.57% | ||
| ROE | 10.17% | ||
| ROIC | 7.25% |
ROA(3y)4.89%
ROA(5y)5.38%
ROE(3y)20.95%
ROE(5y)24.1%
ROIC(3y)7.07%
ROIC(5y)7.73%
1.3 Margins
With a decent Profit Margin value of 7.30%, VZ is doing good in the industry, outperforming 72.73% of the companies in the same industry.
In the last couple of years the Profit Margin of VZ has declined.
With an excellent Operating Margin value of 23.29%, VZ belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Operating Margin of VZ has remained more or less at the same level.
With a decent Gross Margin value of 60.09%, VZ is doing good in the industry, outperforming 63.64% of the companies in the same industry.
In the last couple of years the Gross Margin of VZ has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.29% | ||
| PM (TTM) | 7.3% | ||
| GM | 60.09% |
OM growth 3Y-1.6%
OM growth 5Y-0.37%
PM growth 3Y-14.51%
PM growth 5Y-6.09%
GM growth 3Y-0.56%
GM growth 5Y0.44%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so VZ is still creating some value.
The number of shares outstanding for VZ remains at a similar level compared to 1 year ago.
Compared to 5 years ago, VZ has more shares outstanding
The debt/assets ratio for VZ has remained at the same level compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.25, we must say that VZ is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.25, VZ is in the better half of the industry, outperforming 75.76% of the companies in the same industry.
The Debt to FCF ratio of VZ is 10.89, which is on the high side as it means it would take VZ, 10.89 years of fcf income to pay off all of its debts.
VZ has a better Debt to FCF ratio (10.89) than 63.64% of its industry peers.
VZ has a Debt/Equity ratio of 1.34. This is a high value indicating a heavy dependency on external financing.
VZ has a Debt to Equity ratio (1.34) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 1.25 |
ROIC/WACC1.23
WACC5.9%
2.3 Liquidity
A Current Ratio of 0.66 indicates that VZ may have some problems paying its short term obligations.
VZ's Current ratio of 0.66 is on the low side compared to the rest of the industry. VZ is outperformed by 90.91% of its industry peers.
A Quick Ratio of 0.62 indicates that VZ may have some problems paying its short term obligations.
VZ has a worse Quick ratio (0.62) than 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
VZ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.19%.
The Revenue has been growing slightly by 0.11% in the past year.
The Revenue has been growing slightly by 0.47% on average over the past years.
EPS 1Y (TTM)-5.19%
EPS 3Y-1.31%
EPS 5Y0%
EPS Q2Q%-2.46%
Revenue 1Y (TTM)0.11%
Revenue growth 3Y1.46%
Revenue growth 5Y0.47%
Sales Q2Q%-0.02%
3.2 Future
Based on estimates for the next years, VZ will show a small growth in Earnings Per Share. The EPS will grow by 1.62% on average per year.
VZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.56% yearly.
EPS Next Y0.65%
EPS Next 2Y1.72%
EPS Next 3Y2.46%
EPS Next 5Y1.62%
Revenue Next Year0.8%
Revenue Next 2Y1.41%
Revenue Next 3Y1.46%
Revenue Next 5Y1.56%
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
A Price/Earnings ratio of 9.25 indicates a reasonable valuation of VZ.
93.94% of the companies in the same industry are more expensive than VZ, based on the Price/Earnings ratio.
VZ's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.65.
Based on the Price/Forward Earnings ratio of 8.67, the valuation of VZ can be described as reasonable.
Based on the Price/Forward Earnings ratio, VZ is valued cheaply inside the industry as 96.97% of the companies are valued more expensively.
VZ is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.50, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.25 | ||
| Fwd PE | 8.67 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VZ is valued a bit cheaper than the industry average as 78.79% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as VZ.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.86 | ||
| EV/EBITDA | 6.58 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
VZ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)14.23
PEG (5Y)N/A
EPS Next 2Y1.72%
EPS Next 3Y2.46%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.63%, VZ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.08, VZ pays a better dividend. On top of this VZ pays more dividend than 84.85% of the companies listed in the same industry.
VZ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.63% |
5.2 History
The dividend of VZ has a limited annual growth rate of 1.97%.
VZ has paid a dividend for at least 10 years, which is a reliable track record.
VZ has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)1.97%
Div Incr Years19
Div Non Decr Years23
5.3 Sustainability
114.26% of the earnings are spent on dividend by VZ. This is not a sustainable payout ratio.
The dividend of VZ is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP114.26%
EPS Next 2Y1.72%
EPS Next 3Y2.46%
VERIZON COMMUNICATIONS INC
NYSE:VZ (11/18/2024, 8:04:00 PM)
Premarket: 42.18 -0.07 (-0.17%)42.25
+0.6 (+1.44%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap177.86B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.63% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.25 | ||
| Fwd PE | 8.67 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)14.23
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.57% | ||
| ROE | 10.17% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 23.29% | ||
| PM (TTM) | 7.3% | ||
| GM | 60.09% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-5.19%
EPS 3Y-1.31%
EPS 5Y
EPS Q2Q%
EPS Next Y0.65%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.11%
Revenue growth 3Y1.46%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y