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
Trailing Returns
Performance at a Glance
| Metric | Current stock: VZ | Industry group median |
|---|---|---|
| 1-Year Return | 18.98% | 34.69% |
Risk
Drawdown
Risk at a Glance
| Metric | Current stock: VZ | Industry group median |
|---|---|---|
| 1-Year Volatility | 22.78% | 37.68% |
| Beta | 0.24 | 0.70 |
Company Profile
| Profile Item | VZ |
|---|---|
| Name | Verizon Communications Inc. |
| Country/Region | United States |
| GICS Sector | Communication Services |
| GICS Industry Group | Telecommunication Services |
| GICS Industry | Diversified Telecommunication Services |
| GICS Sub-Industry | Integrated Telecommunication Services |
| Market Capitalization | 200.89 billion USD |
| Currency | USD |
| Exchange | NYSE |
| Listing Date | November 21, 1983 |
| Security Type | Common 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
- --
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
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
Valuation at a Glance
| Metric | Current stock: VZ | Industry group median |
|---|---|---|
| Price-to-Earnings Ratio (TTM) | 11.73 | 16.62 |
| Price-to-Sales Ratio (TTM) | 1.44 | 0.90 |
| Price-to-Book Ratio (MRQ) | 1.94 | 1.88 |
| Free Cash Flow Yield | 9.76% | 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%
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%
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%
Profitability at a Glance
| Metric | Current stock: VZ | Industry 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
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
Financial Strength at a Glance
| Metric | Current stock: VZ | Industry group median |
|---|---|---|
| Current Ratio (MRQ) | 0.64 | 1.11 |
| Debt-to-Equity Ratio (MRQ) | 1.92 | 1.02 |
| Net Debt / EBITDA | 3.77 | 3.82 |
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%
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%
Dividends at a Glance
| Metric | Current stock: VZ | Industry group median |
|---|---|---|
| Dividend Yield (TTM) | 5.88% | 0.44% |
| Dividend Payout Ratio (TTM) | 67.44% | 7.71% |