VERIZON COMMUNICATIONS INC (VZ)
US92343V1044 - Common Stock
We assign a fundamental rating of 5 out of 10 to VZ. VZ was compared to 34 industry peers in the Diversified Telecommunication Services industry. While VZ belongs to the best of the industry regarding profitability, there are concerns on its financial health. VZ is not valued too expensively and it also shows a decent growth rate. Finally VZ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year VZ was profitable.
VZ had a positive operating cash flow in the past year.
In the past 5 years VZ has always been profitable.
VZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 2.57%, VZ is doing good in the industry, outperforming 66.67% of the companies in the same industry.
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.
With an excellent Return On Invested Capital value of 7.25%, VZ belongs to the best of the industry, outperforming 87.88% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for VZ is in line with the industry average of 5.42%.
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
VZ has a better Profit Margin (7.30%) than 69.70% of its industry peers.
In the last couple of years the Profit Margin of VZ has declined.
VZ's Operating Margin of 23.29% is amongst the best of the industry. VZ outperforms 90.91% of its industry peers.
VZ's Operating Margin has been stable in the last couple of years.
VZ's Gross Margin of 60.09% is fine compared to the rest of the industry. VZ outperforms 63.64% of its industry peers.
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.
VZ has about the same amout of shares outstanding than it did 1 year ago.
VZ has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, VZ has about the same debt to assets ratio.
2.2 Solvency
VZ has an Altman-Z score of 1.23. This is a bad value and indicates that VZ is not financially healthy and even has some risk of bankruptcy.
VZ's Altman-Z score of 1.23 is fine compared to the rest of the industry. VZ outperforms 72.73% of its industry peers.
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.
The Debt to FCF ratio of VZ (10.89) is better than 63.64% of its industry peers.
A Debt/Equity ratio of 1.34 is on the high side and indicates that VZ has dependencies on debt financing.
The Debt to Equity ratio of VZ (1.34) is worse than 60.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 1.23 |
ROIC/WACC1.23
WACC5.88%
2.3 Liquidity
VZ has a Current Ratio of 0.66. This is a bad value and indicates that VZ is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.66, VZ is doing worse than 90.91% of the companies in the same industry.
A Quick Ratio of 0.62 indicates that VZ may have some problems paying its short term obligations.
VZ has a Quick ratio of 0.62. This is amonst the worse of the industry: VZ underperforms 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The earnings per share for VZ have decreased by -5.19% in the last year.
Looking at the last year, VZ shows a small growth in Revenue. The Revenue has grown by 0.11% in the last year.
VZ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.47% yearly.
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 2.94% on average per year.
VZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.62% yearly.
EPS Next Y0.59%
EPS Next 2Y1.74%
EPS Next 3Y2.37%
EPS Next 5Y2.94%
Revenue Next Year0.77%
Revenue Next 2Y1.35%
Revenue Next 3Y1.48%
Revenue Next 5Y1.62%
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 8.74, the valuation of VZ can be described as reasonable.
VZ's Price/Earnings ratio is rather cheap when compared to the industry. VZ is cheaper than 90.91% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.73, VZ is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.19, the valuation of VZ can be described as reasonable.
VZ's Price/Forward Earnings ratio is rather cheap when compared to the industry. VZ is cheaper than 96.97% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.83. VZ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.74 | ||
| Fwd PE | 8.19 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VZ is valued a bit cheaper than 78.79% of the companies in the same industry.
VZ's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.15 | ||
| EV/EBITDA | 6.38 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VZ does not grow enough to justify the current Price/Earnings ratio.
VZ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)14.75
PEG (5Y)N/A
EPS Next 2Y1.74%
EPS Next 3Y2.37%
5. Dividend
5.1 Amount
VZ has a Yearly Dividend Yield of 6.78%, which is a nice return.
VZ's Dividend Yield is rather good when compared to the industry average which is at 5.23. VZ pays more dividend than 84.85% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, VZ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.78% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.97%
Div Incr Years20
Div Non Decr Years24
5.3 Sustainability
114.26% 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.
DP114.26%
EPS Next 2Y1.74%
EPS Next 3Y2.37%
VERIZON COMMUNICATIONS INC
NYSE:VZ (12/20/2024, 8:04:00 PM)
After market: 40.0396 +0.11 (+0.27%)39.93
-0.04 (-0.1%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners64.32%
Inst Owner Change1.32%
Ins Owners0.03%
Ins Owner Change0%
Market Cap168.09B
Analysts72.94
Price Target47.43 (18.78%)
Short Float %1.53%
Short Ratio3.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.78% |
Dividend Growth(5Y)1.97%
DP114.26%
Div Incr Years20
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.22%
Min EPS beat(2)-2.67%
Max EPS beat(2)-1.78%
EPS beat(4)0
Avg EPS beat(4)-1.77%
Min EPS beat(4)-2.67%
Max EPS beat(4)-0.26%
EPS beat(8)2
Avg EPS beat(8)-1.37%
EPS beat(12)2
Avg EPS beat(12)-1.55%
EPS beat(16)5
Avg EPS beat(16)-1.05%
Revenue beat(2)0
Avg Revenue beat(2)-3.45%
Min Revenue beat(2)-3.7%
Max Revenue beat(2)-3.21%
Revenue beat(4)0
Avg Revenue beat(4)-3.03%
Min Revenue beat(4)-3.7%
Max Revenue beat(4)-1.53%
Revenue beat(8)0
Avg Revenue beat(8)-3.35%
Revenue beat(12)0
Avg Revenue beat(12)-3.07%
Revenue beat(16)1
Avg Revenue beat(16)-2.77%
PT rev (1m)-0.27%
PT rev (3m)1.97%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.98%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)0.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.77%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.74 | ||
| Fwd PE | 8.19 | ||
| P/S | 1.25 | ||
| P/FCF | 12.15 | ||
| P/OCF | 4.78 | ||
| P/B | 1.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.38 |
EPS(TTM)4.57
EY11.45%
EPS(NY)4.87
Fwd EY12.21%
FCF(TTM)3.29
FCFY8.23%
OCF(TTM)8.35
OCFY20.92%
SpS31.89
BVpS22.88
TBVpS-22.25
PEG (NY)14.75
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.57% | ||
| ROE | 10.17% | ||
| ROCE | 9.79% | ||
| ROIC | 7.25% | ||
| ROICexc | 7.37% | ||
| ROICexgc | 18.62% | ||
| OM | 23.29% | ||
| PM (TTM) | 7.3% | ||
| GM | 60.09% | ||
| FCFM | 10.3% |
ROA(3y)4.89%
ROA(5y)5.38%
ROE(3y)20.95%
ROE(5y)24.1%
ROIC(3y)7.07%
ROIC(5y)7.73%
ROICexc(3y)7.13%
ROICexc(5y)7.92%
ROICexgc(3y)17.22%
ROICexgc(5y)17.92%
ROCE(3y)9.55%
ROCE(5y)10.43%
ROICexcg growth 3Y-2.88%
ROICexcg growth 5Y-6.59%
ROICexc growth 3Y-7.92%
ROICexc growth 5Y-7.05%
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%
F-Score6
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | 10.89 | ||
| Debt/EBITDA | 2.62 | ||
| Cap/Depr | 119.13% | ||
| Cap/Sales | 15.89% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.5% | ||
| Profit Quality | 141.18% | ||
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 1.23 |
F-Score6
WACC5.88%
ROIC/WACC1.23
Cap/Depr(3y)238.21%
Cap/Depr(5y)189.81%
Cap/Sales(3y)29.56%
Cap/Sales(5y)23.76%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.19%
EPS 3Y-1.31%
EPS 5Y0%
EPS Q2Q%-2.46%
EPS Next Y0.59%
EPS Next 2Y1.74%
EPS Next 3Y2.37%
EPS Next 5Y2.94%
Revenue 1Y (TTM)0.11%
Revenue growth 3Y1.46%
Revenue growth 5Y0.47%
Sales Q2Q%-0.02%
Revenue Next Year0.77%
Revenue Next 2Y1.35%
Revenue Next 3Y1.48%
Revenue Next 5Y1.62%
EBIT growth 1Y5.74%
EBIT growth 3Y-0.17%
EBIT growth 5Y0.1%
EBIT Next Year61.94%
EBIT Next 3Y19.48%
EBIT Next 5Y12.33%
FCF growth 1Y27.1%
FCF growth 3Y-15.57%
FCF growth 5Y-4.5%
OCF growth 1Y-3.88%
OCF growth 3Y-3.55%
OCF growth 5Y1.76%