VERIZON COMMUNICATIONS INC (BAC.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:BAC - US92343V1044 - Common Stock
33.025 EUR
+0.02 (+0.05%)
BAC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 35 industry peers in the Diversified Telecommunication Services industry. BAC scores excellent on profitability, but there are concerns on its financial health. BAC scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally BAC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- BAC had positive earnings in the past year.
- In the past year BAC had a positive cash flow from operations.
- In the past 5 years BAC has always 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 (5.11%) is better than 71.43% of its industry peers.
- BAC has a better Return On Equity (18.88%) than 65.71% of its industry peers.
- BAC has a Return On Invested Capital of 7.38%. This is in the better half of the industry: BAC outperforms 65.71% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for BAC is in line with the industry average of 8.42%.
- The last Return On Invested Capital (7.38%) for BAC is above the 3 year average (7.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.11% | ||
| ROE | 18.88% | ||
| ROIC | 7.38% |
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's Profit Margin of 14.43% is amongst the best of the industry. BAC outperforms 85.71% of its industry peers.
- In the last couple of years the Profit Margin of BAC has declined.
- BAC has a better Operating Margin (23.63%) than 88.57% of its industry peers.
- BAC's Operating Margin has been stable in the last couple of years.
- BAC has a Gross Margin (59.41%) which is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of BAC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.63% | ||
| PM (TTM) | 14.43% | ||
| GM | 59.41% |
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.
- Compared to 1 year ago, BAC has about the same amount of shares outstanding.
- Compared to 5 years ago, BAC has more shares outstanding
- Compared to 1 year ago, BAC has an improved debt to assets ratio.
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.
- Looking at the Altman-Z score, with a value of 1.28, BAC is in the better half of the industry, outperforming 62.86% of the companies in the same industry.
- The Debt to FCF ratio of BAC is 7.11, which is on the high side as it means it would take BAC, 7.11 years of fcf income to pay off all of its debts.
- BAC's Debt to FCF ratio of 7.11 is in line compared to the rest of the industry. BAC outperforms 60.00% of its industry peers.
- A Debt/Equity ratio of 1.21 is on the high side and indicates that BAC has dependencies on debt financing.
- BAC's Debt to Equity ratio of 1.21 is in line compared to the rest of the industry. BAC outperforms 48.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 1.28 |
ROIC/WACC1.29
WACC5.74%
2.3 Liquidity
- A Current Ratio of 0.74 indicates that BAC may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.74, BAC is in line with its industry, outperforming 54.29% of the companies in the same industry.
- A Quick Ratio of 0.69 indicates that BAC may have some problems paying its short term obligations.
- The Quick ratio of BAC (0.69) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 3.28% over the past year.
- Measured over the past years, BAC shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.93% on average per year.
- BAC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.42%.
- The Revenue has been growing slightly by 0.44% on average over the past years.
EPS 1Y (TTM)3.28%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%1.68%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.47%
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 3.70% on average per year.
- Based on estimates for the next years, BAC will show a small growth in Revenue. The Revenue will grow by 1.73% on average per year.
EPS Next Y5.15%
EPS Next 2Y3.5%
EPS Next 3Y3.86%
EPS Next 5Y3.7%
Revenue Next Year2.55%
Revenue Next 2Y2.32%
Revenue Next 3Y1.9%
Revenue Next 5Y1.73%
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.
- 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
- A Price/Earnings ratio of 8.34 indicates a reasonable valuation of BAC.
- BAC's Price/Earnings ratio is rather cheap when compared to the industry. BAC is cheaper than 88.57% of the companies in the same industry.
- BAC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.82.
- BAC is valuated reasonably with a Price/Forward Earnings ratio of 8.01.
- 85.71% of the companies in the same industry are more expensive than BAC, based on the Price/Forward Earnings ratio.
- BAC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.34 | ||
| Fwd PE | 8.01 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BAC is valued a bit cheaper than 68.57% of the companies in the same industry.
- BAC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. BAC is cheaper than 82.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.04 | ||
| EV/EBITDA | 6 |
4.3 Compensation for Growth
- BAC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- BAC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.62
PEG (5Y)N/A
EPS Next 2Y3.5%
EPS Next 3Y3.86%
5. Dividend
5.1 Amount
- BAC has a Yearly Dividend Yield of 6.99%, which is a nice return.
- BAC's Dividend Yield is rather good when compared to the industry average which is at 3.26. BAC pays more dividend than 88.57% of the companies in the same industry.
- BAC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.99% |
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 57.56% of its income as dividend. This is a bit on the high side, but may be sustainable.
- The dividend of BAC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP57.56%
EPS Next 2Y3.5%
EPS Next 3Y3.86%
VERIZON COMMUNICATIONS INC / BAC.DE FAQ
What is the ChartMill fundamental rating of VERIZON COMMUNICATIONS INC (BAC.DE) stock?
ChartMill assigns a fundamental rating of 5 / 10 to BAC.DE.
What is the valuation status for BAC stock?
ChartMill assigns a valuation rating of 8 / 10 to VERIZON COMMUNICATIONS INC (BAC.DE). This can be considered as Undervalued.
What is the profitability of BAC stock?
VERIZON COMMUNICATIONS INC (BAC.DE) has a profitability rating of 7 / 10.
What is the expected EPS growth for VERIZON COMMUNICATIONS INC (BAC.DE) stock?
The Earnings per Share (EPS) of VERIZON COMMUNICATIONS INC (BAC.DE) is expected to grow by 5.15% in the next year.
Can you provide the dividend sustainability for BAC stock?
The dividend rating of VERIZON COMMUNICATIONS INC (BAC.DE) is 8 / 10 and the dividend payout ratio is 57.56%.