Verizon

Topics: Stock, Stock market, Share price Pages: 18 (2251 words) Published: April 8, 2014
Report Date: March 14, 2014
Price as of 03/14/2014

Verizon Communications Inc.

$46.08

NYSE: VZ

BUY

We project that Verizon will outperform the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement.

Reiteration 3/14/14
Previous Rating
Hold (1/25/14 - 3/07/14)

52-Week Price Range
$45.91 - $53.91

Earnings Strength
very negative

Market Capitalization
$190.82 Billions

NEUTRAL

Relative Valuation

very positive

neutral

very negative

Annual Dividend Yield
4.6%

EPS increased from $2.26 to an estimated $3.06 over
the past 5 quarters indicating an improving growth
rate. Analyst forecasts have recently been raised.
Company recently reported better than expected
results.

Annual Dividend Rate
$2.12

POSITIVE
neutral

Price Movement

very positive

very negative

Industry
Telecommunications
NEUTRAL
neutral

very positive

1-year price down 5.0%: NEGATIVE
1-quarter down 3.7%: POSITIVE
1-month down 0.9%: POSITIVE

Operating Earnings Yield of 6.6% ranks above 80% of
the companies covered by Ford.

Verizon Communications is a holding company. Through its subsidiaries, the company is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. The company has two primary reportable segments, Verizon Wireless and Wireline. Verizon Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the U.S. Wireline’s voice, data and video communications products and services include voice, broadband Internet access and video, data center and cloud services, and security and managed network services.

Telecommunications performance is NEUTRAL
Peer Group Comparsion

Ticker
VZ
CTL
S
T

Company Name
Verizon Communicatio..
CenturyLink, Inc.
Sprint Corp
AT&T Inc.

VZ Price Performance

2009

Overall
Rating
Buy
Hold
Hold
Buy

Quality
Rating
Good
Good
Average
High
2010

Recent
Price
$46.08
$30.62
$8.78
$32.49
2011

Market
Cap(B)
$190.822
$17.698
$34.557
$169.169

EPS
(ttm)
$2.90
$1.63
$-2.32
$2.50

2012

P/E
(mrq)
15.89
18.79
-13.00
2013

P/B
1 year
(ttm) Price Change
3.48
-5.00
1.09
-11.90
1.08
83.90
1.85
-11.90
2014

Ford Valuation Bands

Valuation bands
based on the highest
and lowest P/E ratio
in the past five years
applied to the trailing
12 month operating
earnings.
Price (US$)

$69.18

Highest expected Price at 24 x Trailing EPS

$48.51
$46.08

Trailing 10 Months Average Price

$33.15

Lowest expected Price at 11 x Trailing EPS

Net Profit on Sales
Cash Flow/share
Book Value/share
Return on Equity
Debt to Equity
Glossary Disclaimer

2009

2010

2011

2012

2013

2009

Fiscal Year End - DEC

2010

2011

2012

2013

6.3%
$9.48
$29.75
8.0%
65.0%

5.9%
$9.42
$13.63
16.2%
117.0%

5.8%
$9.00
$12.13
17.8%
140.0%

5.6%
$9.10
$11.13
19.5%
144.0%

10.0%
$13.53
$13.13
22.1%
94.0%
Copyright ©2014 Ford Equity Research www.fordequity.com

Page 1 of 3

Report Date: March 14, 2014
Price as of 03/14/2014

Verizon Communications Inc.
NYSE: VZ

$46.08
BUY

Recommendation Summary
Ford's Buy recommendation on Verizon Communications Inc. is the result of our systematic analysis on three basic characteristics: earnings strength, relative valuation, and recent stock price movement. The company has managed to produce a neutral trend in earnings per share over the past 5 quarters. However, while recent estimates for the company have been mixed, VZ has posted better than expected results. Based on operating earnings yield, the company is undervalued when compared to all of the...
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