Verizon communications today
Verizon Communications
- 52 week range
- $37.58
▼
$45.36
- Dividend yield
- 6.85%
- P/E ratio
- 17.04
- Price target
- $46.43
After years of struggle, Verizon NYSE:FZ Transformation gains traction and enhances shareholder value. Its quest to build the largest 5G network in North America is paying off with increased share, penetration and customer satisfaction, keeping it on track for sustainable growth. Cash flow is another important factor, improving sequentially and compared to the previous year, enough to boost the health of the balance sheet while reinvesting and paying dividends.
An important takeaway for investors is that 5G industry leader Verizon is trading at less than half its S&P 500 valuation, less than 9 times forward earnings, while yielding nearly 7% in early January. The value may not last much longer.
Verizon Reports Q4 2024
Verizon had a strong quarter in Q4 and in 2024, with revenue rising 1.7% year over year (year-over-year) in the quarter and beating the reported MarketBeat consensus by 100 basis points. These gains were driven by growth in equipment and services, led by a 40% sequential increase in equipment sales.
The business and consumer segments were also strong, resulting in a 26% year-over-year increase in total subscribers to set a ten-year record. FIOS, the fixed product offering, gains market share, with net additions up 9% and gross broadband up 15%.
The margin news is good too. The company’s underlying margin was better than expected and was amplified by one-time mark-to-market adjustments. The bottom line is that adjusted earnings increased by $0.02, or about 1.85%, as cash flow and cash flow grew compared to the prior year. FCF is close to $20 billion for the year, including the tower deal with Vertical Bridge. It added about $2 billion in cash this year, and that’s not expected to be repeated for another decade. Regardless, adjusted free cash flow remains sufficient to maintain capital return expectations, and the additional cash has been put to good use; Debt reduction.
Verizon announced a sequential debt reduction of $8.5 billion and $10.6 billion year over year. This results in lower leverage and improved earnings quality, which is crucial given the earnings outlook, which includes a high yield in early 2025 and growth expectations.
Verizon has increased its distribution annually for 20 years and is on track to be included in the Dividend Aristocrat Index. Inclusion in the index is a value driver for investors because it means increased ownership by all sectors of the market: institutional, managed and retail.
Verizon issues strong guidance: Analysts expect 18% upside in 2025
Verizon Communications dividend payments
- Dividend yield
- 6.85%
- Annual profits
- $2.71
- Increasing track record profits
- 20 years
- Annual earnings growth for 3 years
- 1.94%
- Dividend distribution ratio
- 116.81%
- Upcoming dividend payment
- February 3
VZ Dividend Date
Verizon issued strong guidance underscoring analysts’ confidence in a rebound in 2025. The guidance includes revenue growth of 2% to 2.8% with margins flat to slightly improved. Earnings are expected to grow 3%, resulting in another year of strong cash flow. Cash flow and free cash flow will shrink year over year due to the tower deal in 2024 but will grow on an underlying level.
The guidance is consistent with analyst expectations for a share price increase and could lead to positive revisions. As it stands, analyst trends include consistent sentiment associated with Hold and a price target that implies 18% of important support targets, but there is a bullish bias in sentiment.
The recent upgrade and several price target revisions suggest this stock is a strong buy with a chance to reach the upper range between $50 and $55 by the end of the year. A move toward consensus is enough to put the stock at a multi-year high, confirm a reversal, and put the market on track for a sustainable uptrend.
Technical action is positive after the news. The market rose about 1% in pre-market trading on the morning of the report and confirms support at a critical level.
This level corresponds to the previous support level and the midpoint of the specified range, providing a strong signal to traders. If the market follows this signal, VZ shares should continue higher and retest the upper limit of the range soon. Critical resistance points are located near $42.50 and $45.
Before you consider Verizon Communications, you’ll need to hear this.
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