VERIZON COMMUNICATIONS INC (VZ) Stock Fundamental Analysis
USA - NYSE:VZ - US92343V1044 - Common Stock
39.85 USD
-0.18 (-0.45%)
39.8398 USD
-0.01 (-0.03%)
VZ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 36 industry peers in the Diversified Telecommunication Services industry. While VZ has a great profitability rating, there are quite some concerns on its financial health. VZ scores decently on growth, while it is valued quite cheap. This could make an interesting combination. VZ also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year VZ was profitable.
In the past year VZ had a positive cash flow from operations.
VZ had positive earnings in each of the past 5 years.
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 77.78% of the companies in the same industry.
VZ's Return On Equity of 18.88% is amongst the best of the industry. VZ outperforms 86.11% of its industry peers.
VZ has a better Return On Invested Capital (7.38%) than 77.78% 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 last Return On Invested Capital (7.38%) for VZ 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
With a decent Profit Margin value of 14.43%, VZ is doing good in the industry, outperforming 77.78% of the companies in the same industry.
VZ's Profit Margin has declined in the last couple of years.
VZ has a Operating Margin of 23.63%. This is amongst the best in the industry. VZ outperforms 86.11% 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's Gross Margin of 59.41% is in line compared to the rest of the industry. VZ outperforms 52.78% of its industry peers.
In the last couple of years the Gross Margin of VZ 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), VZ is 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
The debt/assets ratio for VZ has been reduced compared to a year ago.
2.2 Solvency
VZ has an Altman-Z score of 1.28. This is a bad value and indicates that VZ is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.28, VZ is in the better half of the industry, outperforming 77.78% 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.
VZ has a better Debt to FCF ratio (7.11) than 72.22% of its industry peers.
VZ has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
VZ has a Debt to Equity ratio of 1.21. This is comparable to the rest of the industry: VZ outperforms 44.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 1.28 |
ROIC/WACC1.24
WACC5.97%
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 has a Current ratio of 0.74. This is amonst the worse of the industry: VZ underperforms 83.33% 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.
The Quick ratio of VZ (0.69) is worse than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
VZ shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.28%.
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 2.42% in the last 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
VZ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.31% yearly.
The Revenue is expected to grow by 1.73% on average over the next years.
EPS Next Y5.3%
EPS Next 2Y4.02%
EPS Next 3Y3.79%
EPS Next 5Y4.31%
Revenue Next Year2.57%
Revenue Next 2Y2.19%
Revenue Next 3Y1.76%
Revenue Next 5Y1.73%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 8.44, the valuation of VZ can be described as reasonable.
Based on the Price/Earnings ratio, VZ is valued cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.28, VZ is valued rather cheaply.
VZ is valuated reasonably with a Price/Forward Earnings ratio of 8.02.
Based on the Price/Forward Earnings ratio, VZ is valued cheaply inside the industry as 97.22% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 33.61. VZ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.44 | ||
| Fwd PE | 8.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VZ is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
66.67% of the companies in the same industry are more expensive than VZ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.14 | ||
| EV/EBITDA | 6.06 |
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)1.59
PEG (5Y)N/A
EPS Next 2Y4.02%
EPS Next 3Y3.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.99%, VZ is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.35, VZ pays a better dividend. On top of this VZ pays more dividend than 91.67% of the companies listed in the same industry.
VZ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.99% |
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.
VZ's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP57.56%
EPS Next 2Y4.02%
EPS Next 3Y3.79%
39.85
-0.18 (-0.45%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners67.92%
Inst Owner Change-0.79%
Ins Owners0.02%
Ins Owner Change0%
Market Cap168.02B
Revenue(TTM)137.49B
Net Income(TTM)19.84B
Analysts72.73
Price Target49.16 (23.36%)
Short Float %2.31%
Short Ratio4.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.99% |
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)-0.25%
PT rev (3m)0.8%
EPS NQ rev (1m)-1.21%
EPS NQ rev (3m)-1.38%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)0.39%
Revenue NQ rev (1m)-0.48%
Revenue NQ rev (3m)-0.42%
Revenue NY rev (1m)-0.26%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.44 | ||
| Fwd PE | 8.02 | ||
| P/S | 1.22 | ||
| P/FCF | 8.14 | ||
| P/OCF | 4.37 | ||
| P/B | 1.6 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.06 |
EPS(TTM)4.72
EY11.84%
EPS(NY)4.97
Fwd EY12.46%
FCF(TTM)4.9
FCFY12.29%
OCF(TTM)9.12
OCFY22.89%
SpS32.61
BVpS24.91
TBVpS-20.22
PEG (NY)1.59
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 | 1.28 |
F-Score7
WACC5.97%
ROIC/WACC1.24
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 Y5.3%
EPS Next 2Y4.02%
EPS Next 3Y3.79%
EPS Next 5Y4.31%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y0.29%
Revenue growth 5Y0.44%
Sales Q2Q%1.47%
Revenue Next Year2.57%
Revenue Next 2Y2.19%
Revenue Next 3Y1.76%
Revenue Next 5Y1.73%
EBIT growth 1Y4.25%
EBIT growth 3Y-0.48%
EBIT growth 5Y0.78%
EBIT Next Year71.37%
EBIT Next 3Y21.64%
EBIT Next 5Y13.55%
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%.