VERIZON COMMUNICATIONS INC (VZ) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VZ - US92343V1044 - Common Stock
40.48 USD
+0.16 (+0.4%)
40.4396 USD
-0.04 (-0.1%)
VZ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 37 industry peers in the Diversified Telecommunication Services industry. While VZ has a great profitability rating, there are quite some concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on VZ. 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.
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
With a decent Return On Assets value of 5.11%, VZ is doing good in the industry, outperforming 76.32% of the companies in the same industry.
The Return On Equity of VZ (18.88%) is better than 81.58% of its industry peers.
VZ has a Return On Invested Capital of 7.38%. This is amongst the best in the industry. VZ outperforms 81.58% of its industry peers.
VZ had an Average Return On Invested Capital over the past 3 years of 7.15%. This is in line with the industry average of 6.52%.
The 3 year average ROIC (7.15%) for VZ is below the current ROIC(7.38%), indicating increased profibility in the last year.
| 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
With a decent Profit Margin value of 14.43%, VZ is doing good in the industry, outperforming 78.95% of the companies in the same industry.
In the last couple of years the Profit Margin of VZ has declined.
VZ has a better Operating Margin (23.63%) than 89.47% of its industry peers.
VZ's Operating Margin has been stable in the last couple of years.
The Gross Margin of VZ (59.41%) is comparable to the rest of the industry.
VZ's Gross Margin has been stable in the last couple of years.
| 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 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
VZ has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.29, we must say that VZ is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.29, VZ is doing good in the industry, outperforming 76.32% of the companies in the same industry.
The Debt to FCF ratio of VZ is 7.11, which is on the high side as it means it would take VZ, 7.11 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.11, VZ is in the better half of the industry, outperforming 73.68% of the companies in the same industry.
A Debt/Equity ratio of 1.21 is on the high side and indicates that VZ has dependencies on debt financing.
The Debt to Equity ratio of VZ (1.21) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 1.29 |
ROIC/WACC1.23
WACC6.01%
2.3 Liquidity
VZ has a Current Ratio of 0.74. This is a bad value and indicates that VZ is not financially healthy enough and could expect problems in meeting its short term obligations.
VZ's Current ratio of 0.74 is on the low side compared to the rest of the industry. VZ is outperformed by 84.21% of its industry peers.
VZ has a Quick Ratio of 0.74. This is a bad value and indicates that VZ is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.69, VZ is not doing good in the industry: 84.21% of the companies in the same industry are doing better.
| 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, VZ shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.93% on average per year.
The Revenue has been growing slightly by 2.42% in the past year.
Measured over the past years, VZ shows a small growth in Revenue. The Revenue has been growing by 0.44% on average per year.
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
The Earnings Per Share is expected to grow by 4.16% 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 1.61% yearly.
EPS Next Y5.21%
EPS Next 2Y3.86%
EPS Next 3Y3.87%
EPS Next 5Y4.16%
Revenue Next Year2.56%
Revenue Next 2Y2.18%
Revenue Next 3Y1.73%
Revenue Next 5Y1.61%
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
Based on the Price/Earnings ratio of 8.58, the valuation of VZ can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of VZ indicates a rather cheap valuation: VZ is cheaper than 94.74% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.92. VZ is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 8.18, which indicates a very decent valuation of VZ.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VZ indicates a rather cheap valuation: VZ is cheaper than 97.37% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.46, VZ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.58 | ||
| Fwd PE | 8.18 |
4.2 Price Multiples
VZ's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. VZ is cheaper than 76.32% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, VZ is valued a bit cheaper than 68.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.27 | ||
| EV/EBITDA | 6.09 |
4.3 Compensation for Growth
VZ's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
VZ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.64
PEG (5Y)N/A
EPS Next 2Y3.86%
EPS Next 3Y3.87%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.85%, VZ is a good candidate for dividend investing.
VZ's Dividend Yield is rather good when compared to the industry average which is at 2.41. VZ pays more dividend than 89.47% of the companies in the same industry.
VZ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.85% |
5.2 History
The dividend of VZ has a limited annual growth rate of 1.99%.
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)1.99%
Div Incr Years20
Div Non Decr Years24
5.3 Sustainability
VZ pays out 57.56% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of VZ is growing, but earnings are growing more, so the dividend growth is sustainable.
DP57.56%
EPS Next 2Y3.86%
EPS Next 3Y3.87%
40.48
+0.16 (+0.4%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners68.86%
Inst Owner Change0.27%
Ins Owners0.01%
Ins Owner Change0%
Market Cap170.68B
Revenue(TTM)137.49B
Net Income(TTM)19.84B
Analysts72.73
Price Target48.06 (18.73%)
Short Float %2.71%
Short Ratio3.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.85% |
Yearly Dividend2.67
Dividend Growth(5Y)1.99%
DP57.56%
Div Incr Years20
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.6%
Min EPS beat(2)-1.2%
Max EPS beat(2)0.01%
EPS beat(4)2
Avg EPS beat(4)-0.75%
Min EPS beat(4)-2.47%
Max EPS beat(4)0.67%
EPS beat(8)2
Avg EPS beat(8)-1.26%
EPS beat(12)4
Avg EPS beat(12)-1.17%
EPS beat(16)4
Avg EPS beat(16)-1.35%
Revenue beat(2)0
Avg Revenue beat(2)-2.47%
Min Revenue beat(2)-4.22%
Max Revenue beat(2)-0.71%
Revenue beat(4)0
Avg Revenue beat(4)-2.26%
Min Revenue beat(4)-4.22%
Max Revenue beat(4)-0.71%
Revenue beat(8)0
Avg Revenue beat(8)-2.64%
Revenue beat(12)0
Avg Revenue beat(12)-2.99%
Revenue beat(16)0
Avg Revenue beat(16)-2.87%
PT rev (1m)-0.18%
PT rev (3m)-2.47%
EPS NQ rev (1m)-0.88%
EPS NQ rev (3m)-2.19%
EPS NY rev (1m)-0.08%
EPS NY rev (3m)-0.23%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.44%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.58 | ||
| Fwd PE | 8.18 | ||
| P/S | 1.24 | ||
| P/FCF | 8.27 | ||
| P/OCF | 4.44 | ||
| P/B | 1.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.09 |
EPS(TTM)4.72
EY11.66%
EPS(NY)4.95
Fwd EY12.23%
FCF(TTM)4.9
FCFY12.1%
OCF(TTM)9.12
OCFY22.53%
SpS32.61
BVpS24.91
TBVpS-20.22
PEG (NY)1.64
PEG (5Y)N/A
Graham Number51.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.11% | ||
| ROE | 18.88% | ||
| ROCE | 9.88% | ||
| ROIC | 7.38% | ||
| ROICexc | 7.55% | ||
| ROICexgc | 18.55% | ||
| OM | 23.63% | ||
| PM (TTM) | 14.43% | ||
| GM | 59.41% | ||
| FCFM | 15.02% |
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%
ROICexgc growth 3Y0.43%
ROICexgc 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 Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 7.11 | ||
| Debt/EBITDA | 2.49 | ||
| Cap/Depr | 97.11% | ||
| Cap/Sales | 12.95% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.66% | ||
| Profit Quality | 104.09% | ||
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | 1.29 |
F-Score7
WACC6.01%
ROIC/WACC1.23
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)3.28%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%1.68%
EPS Next Y5.21%
EPS Next 2Y3.86%
EPS Next 3Y3.87%
EPS Next 5Y4.16%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.47%
Revenue Next Year2.56%
Revenue Next 2Y2.18%
Revenue Next 3Y1.73%
Revenue Next 5Y1.61%
EBIT growth 1Y4.25%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.78%
EBIT Next Year70.43%
EBIT Next 3Y21.43%
EBIT Next 5Y13.42%
FCF growth 1Y50.97%
FCF growth 3YN/A
FCF growth 5Y2.28%
OCF growth 1Y1.89%
OCF growth 3Y-2.27%
OCF growth 5Y0.64%
VERIZON COMMUNICATIONS INC / VZ FAQ
What is the fundamental rating for VZ stock?
ChartMill assigns a fundamental rating of 5 / 10 to VZ.
What is the valuation status for VZ stock?
ChartMill assigns a valuation rating of 7 / 10 to VERIZON COMMUNICATIONS INC (VZ). This can be considered as Undervalued.
Can you provide the profitability details for VERIZON COMMUNICATIONS INC?
VERIZON COMMUNICATIONS INC (VZ) has a profitability rating of 7 / 10.
How financially healthy is VERIZON COMMUNICATIONS INC?
The financial health rating of VERIZON COMMUNICATIONS INC (VZ) is 3 / 10.
Can you provide the dividend sustainability for VZ stock?
The dividend rating of VERIZON COMMUNICATIONS INC (VZ) is 8 / 10 and the dividend payout ratio is 57.56%.