VERIZON COMMUNICATIONS INC (VZ)
US92343V1044 - Common Stock
VZ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 35 industry peers in the Diversified Telecommunication Services industry. VZ scores excellent on profitability, but there are concerns on its financial health. VZ is valued correctly, but it does not seem to be growing. VZ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
VZ had positive earnings in the past year.
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
The Return On Assets of VZ (2.97%) is better than 74.29% of its industry peers.
VZ has a better Return On Equity (11.99%) than 80.00% of its industry peers.
VZ has a better Return On Invested Capital (6.61%) than 82.86% of its industry peers.
VZ had an Average Return On Invested Capital over the past 3 years of 7.07%. This is in line with the industry average of 5.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.97% | ||
| ROE | 11.99% | ||
| ROIC | 6.61% |
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's Profit Margin of 8.44% is fine compared to the rest of the industry. VZ outperforms 74.29% of its industry peers.
VZ's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 21.74%, VZ belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
VZ's Operating Margin has been stable in the last couple of years.
VZ has a better Gross Margin (59.53%) than 62.86% of its industry peers.
VZ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.74% | ||
| PM (TTM) | 8.44% | ||
| GM | 59.53% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), VZ is creating some value.
VZ has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, VZ has more shares outstanding
VZ has about the same debt/assets ratio as last year.
2.2 Solvency
Based on the Altman-Z score of 1.22, we must say that VZ is in the distress zone and has some risk of bankruptcy.
VZ has a Altman-Z score of 1.22. This is in the better half of the industry: VZ outperforms 80.00% of its industry peers.
The Debt to FCF ratio of VZ is 11.29, which is on the high side as it means it would take VZ, 11.29 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 11.29, VZ is doing good in the industry, outperforming 62.86% of the companies in the same industry.
VZ has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of VZ (1.44) is worse than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 11.29 | ||
| Altman-Z | 1.22 |
ROIC/WACC1.11
WACC5.93%
2.3 Liquidity
VZ has a Current Ratio of 0.71. 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 0.71 is on the low side compared to the rest of the industry. VZ is outperformed by 85.71% of its industry peers.
VZ has a Quick Ratio of 0.71. 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 has a worse Quick ratio (0.67) than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
VZ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.17%.
Looking at the last year, VZ shows a decrease in Revenue. The Revenue has decreased by -1.58% in the last year.
The Revenue has been growing slightly by 0.47% on average over the past years.
EPS 1Y (TTM)-7.17%
EPS 3Y-1.31%
EPS 5Y0%
EPS growth Q2Q-4.17%
Revenue 1Y (TTM)-1.58%
Revenue growth 3Y1.46%
Revenue growth 5Y0.47%
Revenue growth Q2Q0.21%
3.2 Future
The Earnings Per Share is expected to grow by 1.96% 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 1.08% yearly.
EPS Next Y0.19%
EPS Next 2Y1.47%
EPS Next 3Y2.12%
EPS Next 5Y1.96%
Revenue Next Year1.69%
Revenue Next 2Y1.52%
Revenue Next 3Y1.44%
Revenue Next 5Y1.08%
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
The Price/Earnings ratio is 8.47, which indicates a very decent valuation of VZ.
Based on the Price/Earnings ratio, VZ is valued cheaply inside the industry as 91.43% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.02, VZ is valued rather cheaply.
VZ is valuated reasonably with a Price/Forward Earnings ratio of 8.14.
Based on the Price/Forward Earnings ratio, VZ is valued cheaply inside the industry as 91.43% of the companies are valued more expensively.
VZ's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.47 | ||
| Fwd PE | 8.14 |
4.2 Price Multiples
VZ's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. VZ is cheaper than 65.71% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, VZ is valued a bit cheaper than the industry average as 62.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.35 | ||
| EV/EBITDA | 6.78 |
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)44.26
PEG (5Y)N/A
EPS Next 2Y1.47%
EPS Next 3Y2.12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.70%, VZ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.00, VZ pays a better dividend. On top of this VZ pays more dividend than 91.43% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, VZ pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.7% |
5.2 History
The dividend of VZ has a limited annual growth rate of 1.97%.
VZ has been paying a dividend for at least 10 years, so it has 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 Years14
Div Non Decr Years14
5.3 Sustainability
97.97% of the earnings are spent on dividend by VZ. This is not a sustainable payout ratio.
VZ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP97.97%
EPS Next 2Y1.47%
EPS Next 3Y2.12%
VERIZON COMMUNICATIONS INC
NYSE:VZ (4/30/2024, 12:23:01 PM)
39.4873
-0.6 (-1.5%)
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 Cap166.02B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.7% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.47 | ||
| Fwd PE | 8.14 | ||
| 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)44.26
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.97% | ||
| ROE | 11.99% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 21.74% | ||
| PM (TTM) | 8.44% | ||
| GM | 59.53% | ||
| 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 | 1.44 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.67 | ||
| 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)
Growth
EPS 1Y (TTM)-7.17%
EPS 3Y-1.31%
EPS 5Y
EPS growth Q2Q
EPS Next Y0.19%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.58%
Revenue growth 3Y1.46%
Revenue growth 5Y
Revenue growth 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