Founded in Delaware in 1983, VZ is now headquartered in New York City. VZ’s FiOS internet and TV service are certainly quite popular where available. VZ provides reliable content delivery service including its rapidly expanding mobile video segment. However, VZ clearly commits the cardinal sin of business which is leaving money on the table. Millions of individuals living in the United States and beyond are more than willing to pay for VZ internet and cable yet do not have access to the company’s service.
Is VZ poised for a bounce-back after struggling in the initial financial quarters of the year? Or is VZ likely to stagnate moving forward? Let’s find out.
VZ Points of Note
As one of the three top wireless carriers in the United States, VZ is beloved by everyday people and businesses alike. VZ has displayed solid year-over-year growth across the initial quarters of the year. Consolidated operating revenue jumped from 4% in the first quarter of the year to 11% in the following quarter.
VZ’s revenue has spiked on a year-over-year basis in its media, business, and consumer segments by 10%, 1%, and 5%, respectively. Aggregate companywide wireless revenue increased 6% in the second quarter of ’21 compared to that of the same quarter in ’20.
VZ has a relatively low forward P/E ratio of 10.43. This ratio indicates the stock is underpriced at around $55 per share. VZ is also intriguing as it is likely to hold the majority of its value should there be a market correction. This is evidenced by VZ’s beta being a mere 0.48.
VZ is held in high regard by plenty of investors as it pays an attractive dividend. VZ’s current dividend payment is an enticing 4.53%.
V’s price returns are largely negative of late. The stock had price returns in the green from ’16 to ’19 yet VZ entered the red in ’20 and is also in the red in the context of price returns through the first eight months of the year. VZ has a year-to-date price return of -3.28%. The stock’s ’20 price return was -0.13%.
The Analysts’ Take on V
The analysts believe VZ is headed higher. The average analyst price target for VZ is $60.36. If the stock hits this price target, it will have increased by nearly 9%.
However, VZ’s average analyst price target has decreased by nearly 60 cents in the past half-year. It is also concerning that VZ is considered a Hold by 21 analysts, a Buy by six analysts, and a Strong Buy by only two analysts. The stock’s average broker recommendation rating has decreased by 0.26 in the prior year and a half.
V in the Context of the POWR Ratings
VZ has a C POWR Rating grade, meaning it is a Hold. Though the stock has a B Stability component grade, it has a D grade in the Momentum component. VZ has C grades in the Sentiment and Value components. Investors can learn more about VZ’s individual POWR Rating component grades including components such as Quality and Growth by clicking here.
Of the 23 stocks in the Telecom – Domestic segment, VZ is ranked seventh overall. You can learn more about the stocks in this category by clicking here.
Is This the Right Time to Buy VZ?
Now is not the right time to buy VZ. Though VZ has an attractive beta for those seeking growth potential with minimal risk, the stock’s price returns are disappointing, to say the least. Analyst price target reductions are also a red flag. Add in the fact that the stock has a C POWR Rating grade and there is all the more reason to issue a hard pass on VZ.
However, VZ has potential. Keep tabs on VZ’s POWR Rating grade as well as its individual POWR Rating component grades in the weeks and months to come. If VZ transitions from a C POWR Rating grade to a B or A grade, it is safe to move forward with the addition of this telecom stock to your portfolio.
VZ shares were trading at $54.67 per share on Thursday afternoon, down $0.26 (-0.47%). Year-to-date, VZ has declined -3.87%, versus a 20.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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