NYSE:VZ
$28.87
(2/9 3:06PM)
+1.8%
| Open | $28.7 |
Mkt Cap | $80.6 Billion |
| High | $29.08 |
52Wk High | $34.13 |
| Low | $28.57 |
52Wk Low | $26.10 |
| Volume | 18.9 Million |
Avg Vol 10D | 25.9 Million |
Ockham's Rating/Recommendation Summary
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VZ Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at VZ through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.40x and 0.98x respectively.
Utilizing this range we can see that VZ’s current Price to Sales per share ratio of 0.76x is significantly below its average levels historically. In fact, with a current price of $28.74, VZ is a full 37% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for VZ.
VZ Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently VZ is significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for VZ to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 5.79 and a 4.03 low over the same period.
Now that VZ’s current price is $28.74 and its Price to Cash Earnings ratio is 3.29, we are very positive on its outlook from the cash earnings perspective. In fact, VZ is now trading a full 34% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why VZ has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.
VZ Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for VZ to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for VZ is $1.90 producing a current dividend yield of 6.61%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from VZ against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from VZ over previous years was 7.59% while the lowest dividend yield was 2.80%. If you are looking for some “bang for your buck” then a dividend yield of 27.24% above the historical median should be enticing. VZ receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.
Looking for Growth? See What Tech Trader Daily-Barron's Said About Verizon Communications, Incorporated
Growth investors will want to pay attention to the latest news on sales growth at VZ, which you can see on RazorWire.
The Motley Fool CAPS data suggests that investors believe Verizon Communications, Incorporated will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, VZ has been less covered in the news compared to the rest of our universe of stocks. We consider VZ as Undervalued at the current price of $28.87. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… He writes that sales at VERIZON Wireless (VZ, VOD) “are taking longer than expected to gain momentum,” but that there should be some lift next year; he raised his FY 2011 revenue ... …”
Tech Trader Daily-Barron's Brings News Related to Verizon Communications, Incorporated
Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on VZ from Tech Trader Daily-Barron's.
When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Verizon Communications, Incorporated has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on VZ, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… Earlier today, I noted that Bernstein Research this morning raised its rating on VERIZON (VZ), in part based on the potential for the carrier to eventually wrest at least part of ... …”
Cash flows and Verizon Communications, Incorporated Mentioned on Tech Trader Daily-Barron's
Cash flow is a basic fundamental that investors must understand, and Tech Trader Daily-Barron's discussed the most recent developments in VZ's cash flow.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Verizon Communications, Incorporated has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on VZ, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… VERIZON (VZ) shares are getting a boost today from Bernstein Research analyst Craig Moffett, who today lifted his rating on the stock to Neutral from Underperform; Moffett also ... …”
See Who is Talking About News from VZ on Squawk On The Street
News has broken via the television and viral blogs regarding VZ, so investors should take an interest in learning what was said.
Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Squawk On The Street said about VERIZON COMMUNICATIONS, INC.
Learn About RazorWire?Sentiment and VZ Discussed on Squawk Box
Squawk Box talked about the sentiment surrounding VZ and the way they are perceived in the marketplace.
Based on our methodology, Verizon Communications, Incorporated should hold some appeal to value investors as we view it as Undervalued. From a news flow perspective, there is nothing out of the ordinary in where VZ ranks in comparison to other stocks we follow. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… and some of our other headlines this morning, VERIZON is being upgraded to perform from underperformance. Shares of the market component were down almost 10% over the last year. …”
VZ in Developing Markets on Fast Money
News related to emerging markets affecting Verizon Communications, Incorporated today, and Fast Money discussed some recent developments.
Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Fast Money said about VERIZON COMMUNICATIONS, INC.
Learn About RazorWire?News Developing on Tech Trader Daily-Barron's for VZ
The latest news from Tech Trader Daily-Barron's on VZ is available through Ockham's news analytics platform RazorWire.
In comparison to the other stocks that we follow, Verizon Communications, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on VZ, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… Palm (PALM) has seen only “modest” sell through so far for the Pre Plus and Pixi Plus at VERIZON Wireless (VZ, VOD), according to Piper Jaffray analyst T. Michael Walkley. …”
Emerging Markets and VZ Covered on Tech Trader Daily-Barron's
There is no doubt that the emerging markets are where the growth is right now. The latest news mention of VZ on Tech Trader Daily-Barron's was in relation to emerging markets.
At present, Ockham has a valuation stance of Undervalued on VZ, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. In comparison to the other stocks that we follow, Verizon Communications, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days.
“… Telecom sales could be down as much as 10% on lower fiber build out at VERIZON and reduced demand from China, which was 50% of the world market in 2009. …”
What are the Experts Saying? Analysts and VZ on Tech Trader Daily-Barron's
Analysts' opinions can often carry a lot of weight, especially when they make major news and are covered on Tech Trader Daily-Barron's.
In comparison to the other stocks that we follow, Verizon Communications, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on VZ, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… “Our checks indicate Android sell-through has been solid even post the VERIZON Droid push,” he writes in a research note this morning. …”
Verizon Communications, Incorporated Talked About Near M&A Discussion on Tech Trader Daily-Barron's
RazorWire captured a discussion on Tech Trader Daily-Barron's that contained talk of M&A activity and VZ was mentioned as well.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. In comparison to the other stocks that we follow, Verizon Communications, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. At present, Ockham has a valuation stance of Undervalued on VZ, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… ” As for the potential for other bidders, McCormack writes that he is “highly skeptical” that AT&T (T), VERIZON (VZ), Sprint (S), T-Mobile (DT) or America Movil (AMX) or other ... …”