VERIZON COMMUNICATIONS INC (BAC.DE) Stock Fundamental Analysis
FRA:BAC - Deutsche Boerse Ag - US92343V1044 - Common Stock - Currency: EUR
BAC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 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. BAC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year BAC was profitable.
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
The Return On Assets of BAC (4.68%) is better than 81.25% of its industry peers.
Looking at the Return On Equity, with a value of 17.66%, BAC belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
The Return On Invested Capital of BAC (7.49%) is better than 71.88% 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 7.75%.
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
BAC has a better Profit Margin (13.14%) than 84.38% of its industry peers.
BAC's Profit Margin has declined in the last couple of years.
BAC has a Operating Margin of 23.68%. This is amongst the best in the industry. BAC outperforms 87.50% of its industry peers.
In the last couple of years the Operating Margin of BAC has remained more or less at the same level.
The Gross Margin of BAC (60.02%) 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
BAC 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, BAC has about the same amount of shares outstanding.
Compared to 5 years ago, BAC has more shares outstanding
BAC has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.28, we must say that BAC is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.28, BAC perfoms like the industry average, outperforming 53.13% 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.
Looking at the Debt to FCF ratio, with a value of 7.12, BAC is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
A Debt/Equity ratio of 1.20 is on the high side and indicates that BAC has dependencies on debt financing.
With a Debt to Equity ratio value of 1.20, BAC is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 7.12 | ||
| Altman-Z | 1.28 |
ROIC/WACC1.19
WACC6.27%
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 75.00% of its industry peers.
BAC has a Quick 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.
With a Quick ratio value of 0.58, BAC is not doing good in the industry: 78.13% 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
BAC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.64%.
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%.
Measured over the past years, BAC shows a small growth in Revenue. The Revenue has been growing by 0.44% on average per year.
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 4.26% yearly.
BAC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.81% yearly.
EPS Next Y5.15%
EPS Next 2Y4.22%
EPS Next 3Y4.24%
EPS Next 5Y4.26%
Revenue Next Year1.97%
Revenue Next 2Y1.88%
Revenue Next 3Y1.73%
Revenue Next 5Y1.81%
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 9.41 indicates a reasonable valuation of BAC.
Based on the Price/Earnings ratio, BAC is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
BAC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.25.
With a Price/Forward Earnings ratio of 8.73, the valuation of BAC can be described as very reasonable.
Based on the Price/Forward Earnings ratio, BAC is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
BAC is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.41 | ||
| Fwd PE | 8.73 |
4.2 Price Multiples
BAC's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, BAC is valued a bit cheaper than the industry average as 78.13% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.09 | ||
| EV/EBITDA | 6.43 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
BAC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.83
PEG (5Y)N/A
EPS Next 2Y4.22%
EPS Next 3Y4.24%
5. Dividend
5.1 Amount
BAC has a Yearly Dividend Yield of 6.25%, which is a nice return.
BAC's Dividend Yield is rather good when compared to the industry average which is at 4.30. BAC pays more dividend than 90.63% of the companies in the same industry.
BAC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.25% |
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 2Y4.22%
EPS Next 3Y4.24%
FRA:BAC (5/30/2025, 7:00:00 PM)
38.575
+0.55 (+1.45%)
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 Cap162.63B
Analysts73.71
Price Target42.83 (11.03%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.25% |
Yearly Dividend2.36
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)-3.59%
PT rev (3m)-4.21%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)0.23%
EPS NY rev (1m)0.23%
EPS NY rev (3m)0.12%
Revenue NQ rev (1m)0.25%
Revenue NQ rev (3m)0.14%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.41 | ||
| Fwd PE | 8.73 | ||
| P/S | 1.36 | ||
| P/FCF | 9.09 | ||
| P/OCF | 4.88 | ||
| P/B | 1.82 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.43 |
EPS(TTM)4.1
EY10.63%
EPS(NY)4.42
Fwd EY11.46%
FCF(TTM)4.24
FCFY11%
OCF(TTM)7.91
OCFY20.5%
SpS28.45
BVpS21.18
TBVpS-18.86
PEG (NY)1.83
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 | 1.28 |
F-Score7
WACC6.27%
ROIC/WACC1.19
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 Y5.15%
EPS Next 2Y4.22%
EPS Next 3Y4.24%
EPS Next 5Y4.26%
Revenue 1Y (TTM)0.93%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.53%
Revenue Next Year1.97%
Revenue Next 2Y1.88%
Revenue Next 3Y1.73%
Revenue Next 5Y1.81%
EBIT growth 1Y5.56%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.78%
EBIT Next Year70.91%
EBIT Next 3Y21.43%
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%