VERIZON COMMUNICATIONS INC (VZ) Stock Fundamental Analysis
NYSE:VZ - US92343V1044 - Common Stock
43.96 USD
-0.27 (-0.61%)
43.98 USD
+0.02 (+0.05%)
Taking everything into account, VZ scores 5 out of 10 in our fundamental rating. VZ was compared to 34 industry peers in the Diversified Telecommunication Services industry. VZ has an excellent profitability rating, but there are concerns on its financial health. VZ has a correct valuation and a medium 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.
VZ had positive earnings in each of the past 5 years.
VZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
VZ's Return On Assets of 4.75% is fine compared to the rest of the industry. VZ outperforms 73.53% of its industry peers.
VZ has a Return On Equity of 17.65%. This is amongst the best in the industry. VZ outperforms 88.24% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.50%, VZ belongs to the top of the industry, outperforming 82.35% 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 7.14%.
The last Return On Invested Capital (7.50%) for VZ is above the 3 year average (7.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.75% | ||
| ROE | 17.65% | ||
| ROIC | 7.5% |
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
The Profit Margin of VZ (13.28%) is better than 79.41% of its industry peers.
In the last couple of years the Profit Margin of VZ has declined.
VZ's Operating Margin of 23.62% is amongst the best of the industry. VZ outperforms 88.24% of its industry peers.
In the last couple of years the Operating Margin of VZ has remained more or less at the same level.
VZ has a Gross Margin of 59.48%. This is comparable to the rest of the industry: VZ outperforms 58.82% of its industry peers.
VZ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.62% | ||
| PM (TTM) | 13.28% | ||
| GM | 59.48% |
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.
Compared to 1 year ago, VZ has about the same amount of shares outstanding.
The number of shares outstanding for VZ has been increased compared to 5 years ago.
The debt/assets ratio for VZ has been reduced compared to a year ago.
2.2 Solvency
VZ has an Altman-Z score of 1.30. This is a bad value and indicates that VZ is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.30, VZ is doing good in the industry, outperforming 79.41% of the companies in the same industry.
The Debt to FCF ratio of VZ is 7.45, which is on the high side as it means it would take VZ, 7.45 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.45, VZ is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
VZ has a Debt/Equity ratio of 1.20. This is a high value indicating a heavy dependency on external financing.
VZ has a Debt to Equity ratio (1.20) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 7.45 | ||
| Altman-Z | 1.3 |
ROIC/WACC1.21
WACC6.21%
2.3 Liquidity
A Current Ratio of 0.64 indicates that VZ may have some problems paying its short term obligations.
With a Current ratio value of 0.64, VZ is not doing good in the industry: 88.24% of the companies in the same industry are doing better.
A Quick Ratio of 0.60 indicates that VZ may have some problems paying its short term obligations.
The Quick ratio of VZ (0.60) is worse than 88.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.17% over the past year.
The Earnings Per Share has been decreasing by -0.93% on average over the past years.
Looking at the last year, VZ shows a small growth in Revenue. The Revenue has grown by 2.05% in the last year.
The Revenue has been growing slightly by 0.44% on average over the past years.
EPS 1Y (TTM)2.17%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%6.09%
Revenue 1Y (TTM)2.05%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%5.21%
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 5.17% on average per year.
VZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.98% yearly.
EPS Next Y5.35%
EPS Next 2Y4.53%
EPS Next 3Y4.29%
EPS Next 5Y5.17%
Revenue Next Year2.79%
Revenue Next 2Y2.42%
Revenue Next 3Y2%
Revenue Next 5Y1.98%
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
VZ is valuated reasonably with a Price/Earnings ratio of 9.35.
Based on the Price/Earnings ratio, VZ is valued cheaply inside the industry as 97.06% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.08. VZ is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 8.77, the valuation of VZ can be described as very reasonable.
Based on the Price/Forward Earnings ratio, VZ is valued cheaply inside the industry as 97.06% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.67, VZ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.35 | ||
| Fwd PE | 8.77 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VZ indicates a somewhat cheap valuation: VZ is cheaper than 70.59% of the companies listed in the same industry.
VZ's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.45 | ||
| EV/EBITDA | 6.49 |
4.3 Compensation for Growth
The 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)1.75
PEG (5Y)N/A
EPS Next 2Y4.53%
EPS Next 3Y4.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.02%, VZ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1803.71, VZ pays a better dividend. On top of this VZ pays more dividend than 82.35% of the companies listed 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 | 6.02% |
5.2 History
The dividend of VZ has a limited annual growth rate of 1.99%.
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)1.99%
Div Incr Years20
Div Non Decr Years24
5.3 Sustainability
62.46% of the earnings are spent on dividend by VZ. This is not a sustainable payout ratio.
The dividend of VZ is growing, but earnings are growing more, so the dividend growth is sustainable.
DP62.46%
EPS Next 2Y4.53%
EPS Next 3Y4.29%
43.96
-0.27 (-0.61%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners67.61%
Inst Owner Change0.51%
Ins Owners0.02%
Ins Owner Change10.23%
Market Cap185.35B
Analysts73.33
Price Target49.41 (12.4%)
Short Float %1.94%
Short Ratio4.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.02% |
Yearly Dividend2.67
Dividend Growth(5Y)1.99%
DP62.46%
Div Incr Years20
Div Non Decr Years24
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.34%
Min EPS beat(2)0.01%
Max EPS beat(2)0.67%
EPS beat(4)2
Avg EPS beat(4)-0.89%
Min EPS beat(4)-2.47%
Max EPS beat(4)0.67%
EPS beat(8)3
Avg EPS beat(8)-1.05%
EPS beat(12)4
Avg EPS beat(12)-1.09%
EPS beat(16)5
Avg EPS beat(16)-1.25%
Revenue beat(2)0
Avg Revenue beat(2)-1.46%
Min Revenue beat(2)-2.2%
Max Revenue beat(2)-0.71%
Revenue beat(4)0
Avg Revenue beat(4)-2.01%
Min Revenue beat(4)-3.21%
Max Revenue beat(4)-0.71%
Revenue beat(8)0
Avg Revenue beat(8)-2.45%
Revenue beat(12)0
Avg Revenue beat(12)-2.77%
Revenue beat(16)0
Avg Revenue beat(16)-2.84%
PT rev (1m)1.33%
PT rev (3m)1.56%
EPS NQ rev (1m)0.05%
EPS NQ rev (3m)-1.75%
EPS NY rev (1m)0.44%
EPS NY rev (3m)0.19%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.58%
Revenue NY rev (1m)0.71%
Revenue NY rev (3m)0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.35 | ||
| Fwd PE | 8.77 | ||
| P/S | 1.35 | ||
| P/FCF | 9.45 | ||
| P/OCF | 5 | ||
| P/B | 1.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.49 |
EPS(TTM)4.7
EY10.69%
EPS(NY)5.02
Fwd EY11.41%
FCF(TTM)4.65
FCFY10.58%
OCF(TTM)8.8
OCFY20.02%
SpS32.49
BVpS24.44
TBVpS-20.69
PEG (NY)1.75
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.75% | ||
| ROE | 17.65% | ||
| ROCE | 10.04% | ||
| ROIC | 7.5% | ||
| ROICexc | 7.58% | ||
| ROICexgc | 18.79% | ||
| OM | 23.62% | ||
| PM (TTM) | 13.28% | ||
| GM | 59.48% | ||
| FCFM | 14.31% |
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 | 7.45 | ||
| Debt/EBITDA | 2.45 | ||
| Cap/Depr | 96.24% | ||
| Cap/Sales | 12.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.41% | ||
| Profit Quality | 107.77% | ||
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 1.3 |
F-Score7
WACC6.21%
ROIC/WACC1.21
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)2.17%
EPS 3Y-5.27%
EPS 5Y-0.93%
EPS Q2Q%6.09%
EPS Next Y5.35%
EPS Next 2Y4.53%
EPS Next 3Y4.29%
EPS Next 5Y5.17%
Revenue 1Y (TTM)2.05%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%5.21%
Revenue Next Year2.79%
Revenue Next 2Y2.42%
Revenue Next 3Y2%
Revenue Next 5Y1.98%
EBIT growth 1Y5.16%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.78%
EBIT Next Year71.32%
EBIT Next 3Y21.57%
EBIT Next 5Y13.82%
FCF growth 1Y58.54%
FCF growth 3YN/A
FCF growth 5Y2.28%
OCF growth 1Y-1.06%
OCF growth 3Y-2.27%
OCF growth 5Y0.64%