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Verizon Communications (VZ) Stock Analysis

Here is a fundamental analysis of Verizon Communications (VZ), benchmarking its profitability, financial strength, dividend and valuation against its industry group peers.

Performance

Cumulative Growth

VZ
GSPC
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Verizon Communications (VZ) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for Verizon Communications (VZ) and S&P 500 (GSPC). Returns over one year are annualized.

Performance at a Glance

Verizon Communications (VZ) metric values compared with Telecommunication Services industry-group medians
MetricCurrent stock: VZIndustry group median
1-Year Return18.98%34.69%

Risk

Drawdown

VZ
GSPC
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Verizon Communications (VZ) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Risk at a Glance

Verizon Communications (VZ) metric values compared with Telecommunication Services industry-group medians
MetricCurrent stock: VZIndustry group median
1-Year Volatility22.78%37.68%
Beta0.240.70

Company Profile

Company profile fields for Verizon Communications (VZ)
Profile ItemVZ
NameVerizon Communications Inc.
Country/RegionUnited States
GICS SectorCommunication Services
GICS Industry GroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
GICS Sub-IndustryIntegrated Telecommunication Services
Market Capitalization200.89 billion USD
CurrencyUSD
ExchangeNYSE
Listing DateNovember 21, 1983
Security TypeCommon Stock

Valuation

Price-to-Earnings Ratio (TTM)

Verizon Communications (VZ) trades at P/E ratio of 11.73, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.

VZ

Telecommunication Services industry group

11.73

Group distribution
Max
36.60
Q3
21.85
Median
16.62
VZ
11.73
Q1
8.57
Min
2.87
Largest peers
CHT
28.99
TMUS
20.07
AMX
16.62
VZ
11.73
T
7.76
VOD
--
SATS
--
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Where Verizon Communications (VZ) stands on P/E ratio within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Price-to-Sales Ratio (TTM)

Verizon Communications (VZ) trades at 1.44 on P/S ratio, roughly in the peer group’s normal range. The market is not making a strong cheap-or-rich statement about its revenue base.

VZ

Telecommunication Services industry group

1.44

Group distribution
Max
3.67
Q3
2.31
VZ
1.44
Median
0.90
Q1
0.39
Min
0.00
Largest peers
TMUS
2.26
SATS
2.23
VZ
1.44
T
1.29
VOD
0.88
CHT
0.15
AMX
0.09
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Where Verizon Communications (VZ) stands on P/S ratio within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Price-to-Book Ratio (MRQ)

Verizon Communications (VZ) trades at 1.94 on P/B ratio, roughly in line with the industry’s normal price-to-book range. Its balance sheet is not being priced at a clear discount or premium versus peers.

VZ

Telecommunication Services industry group

1.94

Group distribution
Max
8.01
Q3
4.28
VZ
1.94
Median
1.88
Q1
0.80
Min
0.01
Largest peers
CHT
11.41
SATS
5.86
AMX
3.89
TMUS
3.67
VZ
1.94
T
1.50
VOD
1.23
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Where Verizon Communications (VZ) stands on P/B ratio within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Valuation at a Glance

Verizon Communications (VZ) metric values compared with Telecommunication Services industry-group medians
MetricCurrent stock: VZIndustry group median
Price-to-Earnings Ratio (TTM)11.7316.62
Price-to-Sales Ratio (TTM)1.440.90
Price-to-Book Ratio (MRQ)1.941.88
Free Cash Flow Yield9.76%10.77%

Profitability

Return on Equity (TTM)

Verizon Communications (VZ) posts ROE of 17.20%, roughly around the peer group’s normal range. Shareholders’ equity is producing a return that looks broadly typical for the industry.

VZ

Telecommunication Services industry group

17.20%

Group distribution
Max
43.27%
Q3
17.95%
VZ
17.20%
Median
6.68%
Q1
-17.20%
Min
-47.97%
Largest peers
AMX
21.13%
T
18.37%
TMUS
18.03%
VZ
17.20%
CHT
9.99%
VOD
0.11%
SATS
-112.28%
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Where Verizon Communications (VZ) stands on ROE within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Net Profit Margin (TTM)

Verizon Communications (VZ) keeps 12.46% of revenue as net profit, putting net margin in the upper peer quartile. After operating costs, interest, and taxes, more of each sales dollar reaches shareholders than it does at most industry peers.

VZ

Telecommunication Services industry group

12.46%

Group distribution
Max
41.74%
VZ
12.46%
Q3
12.36%
Median
5.02%
Q1
-11.20%
Min
-31.47%
Largest peers
T
16.94%
CHT
16.24%
VZ
12.46%
TMUS
11.65%
AMX
9.23%
VOD
-0.98%
SATS
-97.56%
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Where Verizon Communications (VZ) stands on net margin within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Operating Profit Margin (TTM)

Verizon Communications (VZ) turns 25.19% of revenue into operating profit, putting operating margin in the upper peer quartile. Before financing and taxes enter the picture, the day-to-day business keeps more of each sales dollar than most industry peers.

VZ

Telecommunication Services industry group

25.19%

Group distribution
Max
35.60%
VZ
25.19%
Q3
21.32%
Median
12.69%
Q1
4.41%
Min
-8.71%
Largest peers
VZ
25.19%
TMUS
24.01%
T
22.72%
CHT
21.84%
AMX
21.33%
SATS
8.91%
VOD
7.78%
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Where Verizon Communications (VZ) stands on operating margin within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Profitability at a Glance

Verizon Communications (VZ) metric values compared with Telecommunication Services industry-group medians
MetricCurrent stock: VZIndustry group median
Return on Equity (TTM)17.20%6.68%
Return on Assets (TTM)5.08%2.86%
Net Profit Margin (TTM)12.46%5.02%
Operating Profit Margin (TTM)25.19%12.69%
Gross Profit Margin (TTM)58.91%56.37%

Financial Strength

Current Ratio (MRQ)

Verizon Communications (VZ) has current ratio of 0.64, in the tighter-liquidity quartile for its industry. The short-term cushion is thinner than most peers carry, even if the absolute comfort level still depends on the business model.

VZ

Telecommunication Services industry group

0.64

Group distribution
Max
2.39
Q3
1.66
Median
1.11
Q1
0.92
VZ
0.64
Min
0.25
Largest peers
CHT
1.64
VOD
1.14
TMUS
1.09
T
0.92
AMX
0.72
VZ
0.64
SATS
0.30
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Where Verizon Communications (VZ) stands on current ratio within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Debt-to-Equity Ratio (MRQ)

Verizon Communications (VZ) has debt-to-equity ratio of 1.92, roughly in line with the peer group’s normal leverage range. Its mix of debt and equity looks typical for the industry.

VZ

Telecommunication Services industry group

1.92

Group distribution
Max
3.82
Q3
2.12
VZ
1.92
Median
1.02
Q1
0.65
Min
0.00
Largest peers
SATS
5.15
TMUS
2.19
VZ
1.92
AMX
1.71
T
1.25
VOD
1.00
CHT
0.10
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Where Verizon Communications (VZ) stands on debt-to-equity ratio within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Financial Strength at a Glance

Verizon Communications (VZ) metric values compared with Telecommunication Services industry-group medians
MetricCurrent stock: VZIndustry group median
Current Ratio (MRQ)0.641.11
Debt-to-Equity Ratio (MRQ)1.921.02
Net Debt / EBITDA3.773.82

Dividends

Dividend Yield (TTM)

Verizon Communications (VZ) has dividend yield of 5.88%, in the upper peer-yield quartile while still inside the industry range. The dividend offers more cash income per dollar of share price than most peers, though payout coverage still matters.

VZ

Telecommunication Services industry group

5.88%

Group distribution
Max
8.73%
VZ
5.88%
Q3
3.71%
Median
0.44%
Q1
0.00%
Min
0.00%
Largest peers
VZ
5.88%
T
4.71%
CHT
3.59%
VOD
3.56%
TMUS
2.16%
AMX
2.04%
SATS
0.00%
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Where Verizon Communications (VZ) stands on dividend yield within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

Verizon Communications (VZ) has payout ratio of 67.44%, above the industry’s usual payout band. A larger share of earnings is going to dividends, so the cushion narrows if profit weakens.

VZ

Telecommunication Services industry group

67.44%

Group distribution
Max
149.01%
VZ
67.44%
Q3
60.13%
Median
7.71%
Q1
0.00%
Min
0.00%
Largest peers
VOD
101.44%
CHT
96.91%
VZ
67.44%
TMUS
40.38%
T
36.51%
AMX
36.06%
SATS
0.00%
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Where Verizon Communications (VZ) stands on payout ratio within its Telecommunication Services peer group — the box is the group’s distribution and the dots its largest members.

Dividends at a Glance

Verizon Communications (VZ) metric values compared with Telecommunication Services industry-group medians
MetricCurrent stock: VZIndustry group median
Dividend Yield (TTM)5.88%0.44%
Dividend Payout Ratio (TTM)67.44%7.71%