Analyzing Verizon Communications (VZ) & Its Peers

Verizon Communications (NYSE: VZ) is one of 41 public companies in the “Integrated Telecommunications Services” industry, but how does it compare to its peers? We will compare Verizon Communications to similar businesses based on the strength of its profitability, analyst recommendations, valuation, risk, earnings, institutional ownership and dividends.

Institutional and Insider Ownership



62.1% of Verizon Communications shares are held by institutional investors. Comparatively, 66.8% of shares of all “Integrated Telecommunications Services” companies are held by institutional investors. 0.1% of Verizon Communications shares are held by insiders. Comparatively, 6.1% of shares of all “Integrated Telecommunications Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Verizon Communications and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verizon Communications 0 19 4 0 2.17
Verizon Communications Competitors 464 1392 1562 56 2.35

Verizon Communications presently has a consensus target price of $52.43, suggesting a potential upside of 15.44%. As a group, “Integrated Telecommunications Services” companies have a potential upside of 52.37%. Given Verizon Communications’ peers stronger consensus rating and higher possible upside, analysts plainly believe Verizon Communications has less favorable growth aspects than its peers.

Dividends

Verizon Communications pays an annual dividend of $2.36 per share and has a dividend yield of 5.2%. Verizon Communications pays out 60.5% of its earnings in the form of a dividend. As a group, “Integrated Telecommunications Services” companies pay a dividend yield of 4.7% and pay out -325.9% of their earnings in the form of a dividend. Verizon Communications has increased its dividend for 10 consecutive years.

Volatility & Risk

Verizon Communications has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Verizon Communications’ peers have a beta of 1.05, meaning that their average stock price is 5% more volatile than the S&P 500.

Earnings and Valuation

This table compares Verizon Communications and its peers gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Verizon Communications $125.98 billion $13.13 billion 11.65
Verizon Communications Competitors $18.08 billion $1.35 billion -47.75

Verizon Communications has higher revenue and earnings than its peers. Verizon Communications is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Verizon Communications and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verizon Communications 12.80% 58.66% 6.13%
Verizon Communications Competitors -0.04% -0.35% 1.29%

Summary

Verizon Communications peers beat Verizon Communications on 8 of the 15 factors compared.

Verizon Communications Company Profile

Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.

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