Verizon (VZ) Stock Analysis

Verizon Dividend

The Verizon (VZ) dividend has been paid every year since 1984 (formerly Bell Atlantic) and increased for 20 consecutive years; qualifying the company as a Dividend Contender.

Current Dividend Annualized: $2.71

Verizon (VZ) Intrinsic Value – Margin of Safety Analysis          

(updated February 2025)

Normalized Diluted Earnings Per Share (TTM): $4.14
Free Cash Flow Per Share (TTM): $4.48
Cash Flow From Operations (CFO) Per Share (TTM): $8.74

Estimated Intrinsic Value: $48

Target Buy Price Based on Required Margin of Safety =  $34
(Required Margin of Safety Based On Risk Stability Grade:

A = 0%, B = 20%, C = 40%, D = 60%, F = 80%)

Target SELL Price Based on Estimated Intrinsic Value = $55
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 40%, B = 25%, C = 15%, D = 5%, F = 0%)

Risk / Stability Grade:  C

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

Financial Risk Grade: C

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

Business Quality Grade: C

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report: 12/31/24

AAAMP Portfolios Position Disclosures:
Treasure Trove Dividend (TTD) – None
Global Dividend Value (GDV) – LONG
Dividend Growth & Income (DGI) – LONG
Global Value (GV) – None
Global Value Aggressive (GVA) – None
Global Conservative Income (GCI) – None
Global High Income (GHI) – LONG

Company Description

Sector: Communication Services
Industry: Telecom Services

Company Overview:
Verizon Communications (VZ) is a major telecommunications company providing wireless services, broadband internet, and digital TV to consumers and businesses across the United States. Verizon operates one of the largest wireless networks in the country, offering services such as 5G, internet of things (IoT) solutions, and video streaming. It also serves corporate customers through enterprise solutions like cloud services and network security.

Company Strengths:
Verizon benefits from a leading position in the U.S. wireless market, with a strong brand, expansive network infrastructure, and a large customer base. The company’s investment in 5G technology provides significant growth potential, as demand for faster wireless services continues to increase. Verizon’s diverse portfolio of consumer, business, and enterprise solutions ensures steady revenue streams, and its solid dividend payouts make it attractive to income-focused investors.

Company Challenges:
Verizon faces intense competition from other wireless providers like AT&T and T-Mobile, particularly in the 5G rollout and pricing pressure. The company is also grappling with declining revenues from its legacy wireline business, as more consumers switch to wireless services. Additionally, large capital expenditures required for 5G network expansion and ongoing customer acquisition costs create margin pressures. Regulatory scrutiny and the challenge of maintaining network quality in a competitive environment pose ongoing risks.

Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.