I am going to go over some details for Verizon Communications (VZ) to understand it’s current valuation, not a frequent subject of discussion on many news outlets. At the end I will give VZ a score based on our proprietary formulas and you can decide where to place your bets.
The long-term trend of the EPS is a vital number as it helps understand the future potential of Verizon Communications. It is usually expressed as a percentage and is then referred to as the EPS growth rate, which is -2.53%. EPS growth is a vital measure of execution of the strategy for Verizon Communications since it indicates how much well the business is allocating resources to benefit shareholders.
Verizon Communications (VZ) trades as part of the communication services industry and is in the communication services sector. The company CEO is Lowell C. McAdam. Verizon Communications is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. It offers voice, data and video services and solutions to wireless and wireline networks.
Historical Trading Performance:
Over the last five trading days, Verizon Communications shares increased 1.39% and in the past 30 trading days it returned 8.11%. Over three months, it changed 11.69%. In one year it has changed 13.08% and within that year its 52-week high was 54.77 and its 52-week low was 43.97. VZ stock is 20.57% above its 52 Week Low.
Our calculations result in a 200 day moving average of 48.59 and a 50 day moving average of 49.83. Currently VZ stock is trading 9.10% above its 200 day moving average.
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Previous Intraday Trading Performance:
The VZ stock showed a previous change of 0.59% with an open at 52.69 and a close of 53.01. It reached an intraday high of 53.27 and a low of 52.66.
VZ stock has a market cap of $219.0b with 4.1b shares outstanding, of which the float is 4.1b shares. Trading volume reached 10,389,846 shares compared to its average volume of 12,730,962 shares. Based on the current average volume and close price, the trading liquidity is good.
The last annual fiscal EPS for the company was reported at 7.36 that ended on 31st of December 2017, which according to the previous close, that is a PE of 7.20. Based on 20 analyst estimates, the consensus EPS for the next quarter is 1.14. The TTM EPS is 4.21, which comes to a TTM PE of 12.59.
The last four quarter reported earnings per share:
The trailing twelve month dividend per share was 2.36, which is a dividend yield of 4.48%. Also, the payout ratio is 56.06%, therefore the dividend is safe according to our calculations. VZ stock has a high dividend yield, but because the company has sufficient earnings to cover future dividends, it may be a good investment opportunity for an income portfolio. Not always, but companies with a high dividend yield and are not REITs or MLPs, may be undervalued and therefore there may be an opportunity for the stock price to appreciate in the short-term. However, it may be best to look at the historical dividend yield of the stock and it’s industry to understand what is normal or average.
Base on our calculations, the intrinsic value per share is 89.67, which means it is possibly undervalued and has a margin of safety of 40.88%
Indicators to Watch:
Based on the latest filings, there is 69.70% of institutional ownership. Short-interest is 35,866,602, which is 0.87% of shares outstanding. The short-interest ratio or days-to-cover ratio is 2.14. This stock has some short interest, but it may be normal and no cause for concern if long the position.
The current calculated beta is 0.69
Based on last reported financials, the company’s return on equity is 80.18%, return on assets is 11.99%, profit margin is 24.24%, price-to-sales is 1.67 and price-to-book is 4.16.
All scores are out of six:
4 :Valuation Score
6 :Past Performance Score
2 :Financial Strength Score
1 :Future Growth Score
6 :Dividend Score
3 :Overall Score