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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Verizon Communications Inc. (XNYS:VZ) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VZ
Name:
VERIZON COMMUNICATIONS INC. (XNYS:VZ)
Sector:
- 838000.00K
Industry:
Telecom Services
CEO:
Mr. Hans Vestberg
Total Employees:
118,400
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 111.07% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VERIZON COMMUNICATIONS INC.(VZ) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TELECOM SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
41.3
One Month Price Target:
$41.38
Six Month Price Target :
$41.77
Likely Price in One Year's Time:
Ticker:
$42.23
Likely Trading Range Today Under (Normal Volatility)
$41.19
Price Upper limit ($) :
$41.37
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$40.18
This week:
$38.8
This month :
$36.29
Other Primary facts
Market Cap:
172.61B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
4.20B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
7.21%
-6.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$46.51
$44.19
$36.09
$38.41
Medium risk (<10%) entry points
Buy Call
Sell Call
$43.43
Buy Put:
Sell Put:
$42.94
$39.16
$39.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VZ
Sharpe Ratio:
-4.43%
Comparison:
VZ, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -555.22% lower than the industry
& is -294.19% lower than the market/S&P 500 average
Average Returns/Yield of
VZ
Daily returns:
-0.05%
Weekly returns:
-0.24%
Monthly returns:
-0.97%
Yearly returns:
17.77%
Comparison of returns:
Average annual returns/yield (last 3 years) is -165.56% below industry average
Classification:
VZ, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.81
Statistical test of Returns:
VZ has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.30%
Weekly Volatility:
2.90%
Monthly Volatility:
5.80%
Yearly Volatility:
20.09%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.84%
Volatility in last five trading days has been -35.47% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-2.71%
Weekly VaR:
-6.06%
Monthly VaR:
-12.13%
How Much Can the price of
VZ
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-11%
Worst case (decline):
-42.01%
This translates to price declining to:
$36.64
This translates to price declining to:
$23.95
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
VZ is -14.40% less risky an investment compared to the market/S&P 500 & is -26.67% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -61.95% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VZ
Beta in relation to market/S&P 500--0.34
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.134
Beta in relation to Nasdaq (XNAS):
0.281
Beta in relation to all global stocks::
0.398
Beta Comparison & Analysis
Beta of competitors/peers::
1.21
Beta is -72.28% lower than peers
Average Industry Beta:
0.819
Beta is -59.03% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
15.14%
Sustainable growth rate is 48.92% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.171
Alpha is -289.67% below industry average alpha yield
Alpha is -1089% below the market average
Analysis of Cost of Capital of
VZ
Equity cost of capital:
0.054
Equity cost of capital is -37.80% below industry mean WACC
Unlevered (without debt) cost of capital:
2.18%
Before-tax cost of debt:
1.76%
After-tax cost of debt:
1.39%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.39%
WACC is -38.44% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$31.98
Revenue growth rate per share of (3Y):
2.04
Annual revenue growth rate is -99.54% below industry average
EPS:
$5.14
Expected Annual growth rate of EPS (3Y):
4.51%
Expected future EPS growth rate is -81.77% lower than the Telecom Services industry
Free cash flow (FCF) per share:
$2.43
Balance sheet equity growth per share: 6.58%
Equity growth rate per share is -141.35% lower than the industry
Debt per share
$38.79
EBITDA per share
$11.27
Valuation Analysis Today of
VZ
P/E Ratio:
8.29
P/E Ratio of Competitors/Peers:
37.13
P/E ratio is -77.66% lower than main peers & is -71.89% lower than the industry
Stock price/value with industry average P/E ratio: $151.67
VZ is -72.77% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $92.39
Present value of the expected future dividends only: $50.66
P/S (Price to Sales ratio):
1.29
Price to sales ratio is -79.35% below the industry mean
P/B (Price to book value ratio):
2.04
Price to free cash flow: 16.97
-
Net income growth rate (3Y):
41.69%
Net income growth rate is -89.76% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 12.40%
Dividend yeild: 6.17%
Previous Dividend: $0.64
Previous adjusted dividend: $0.64
Previous Dividend: $2.55
Expected next dividend best case: $0.65
Expected next dividend worst case: $0.63
Average dividend payment (long-term): $0.63
Average dividend increase/decrease (growth rate) % per period: 0.40%
Expected next dividend payment date: 08/01/2022
Expected next dividend record date: 07/07/2022
Expected next dividend declaration date: 30/05/2022
Previous dividend payment date: 05/02/2022
Previous dividend record date: 04/08/2022
Previous dividend declaration date: 28/02/2022
Dividend History:
2022-04-07--$0.64
2021-10-07--$0.64
2021-04-08--$0.63
2022-01-07--$0.64
2021-07-08--$0.63
2021-01-07--$0.63
Dividend growth rate is -112.00% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
194.47%
Net debt to equity ratio:
213.10%
Debt to assets ratio:
44.54%
Net debt to assets ratio:
48.81%
Debt-to-asset ratio is -41.74% below industry average
Ability to repay debt:
Interest coverage ratio:
14.92
Interest coverage ratio is 850.69% more than industry average
Looking forward:
Debt growth rate:
18.19%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.80%
Analysis of Key Statistics
Correlation of price movement with the market:
0.537
Statistical significance of correlation:
VZ has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.461
Stock price is 16.39% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.461
Correlation of price movement with Nasdaq (^IXIC):
0.01
Covariance of price movement with the market:
0.007
Kurtosis
6.792
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.188
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
VZ
Gross Profit Margin Ratio:
230%
Operating Profit Margin Ratio:
24.18%
Operating profit margin is 672.58% higher than the industry
Net Profit Margin Ratio:
230%
Effective Tax Rate:
22.78%
Effective tax rate is -29.44% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.55%
Return on equity (ROE) is -765.34% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.85%
Return on assets (ROA) is -3310.75% lower than the industry
Financial Leverage:
1.8x
Current Ratio:
0.76
Current ratio is -52.70% below industry average
Cash Conversion Cycle (days):
70
Cash conversion cycle is -1.07% below industry average
The remaining useful life of property plant & equipment is: 10.1 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates 13% more revenue than industry average revenue per employee
EBITDA generated per employee:
399.6K
Each employee generates 16% more EBITDA than industry average revenue per employee
Profit generated per employee:
180.7K
Each employee generates 74% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.1K
Each employee generates -112% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.8M
Each employee generates -112% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
VZ
AT&T INC. (XNYS:T)
SEA LIMITED (XNYS:SE)
SNAP INC. (XNYS:SNAP)
America Mobile (XNYS:AMOV)
RELX PLC (XNYS:RELX)
ROBLOX CORPORATION (XNYS:RBLX)
BCE Inc (XNYS:BCE)
DOORDASH, INC. (XNYS:DASH)
Spotify Technology SA (XNYS:SPOT)
Current Analyst Ratings
Strong buy�8%
Buy�25%
Hold�100%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
134.30B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
57.13B
77.17B
-
-
28.43B
-
16.27B
44.70B
43.00M
3.17B
16.27B
47.31B
32.47B
21.40B
28.43B
6.47B
21.40B
Statement of Cash Flow
Date:
Period:
4.24B
Differed Income Tax :
627.00M
Stock Based Compensation :
-
Change in Working Capital :
- 3492000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
739.00M
Net Cash Provided by Operating Activities:
6.82B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.66B
-
1.66B
23.62B
3.66B
6.65B
35.58B
127.34B
28.63B
159.52B
1.07B
-
13.58B
330.14B
-
365.72B
-
17.27B
-
-
29.32B
46.59B
162.89B
29.72B
233.96B
-
280.54B
429.00M
73.89B
- 906000.0K
10.35B
March 31, 2022 at 6:00:00 AM
101.83B
83.76B
364.30B
-
180.16B
178.5B
-
- 7995000.00K
- 7995000.00K
- 8206000.00K
-
-
- 2654000.00K
11.11B
245.00M
-
- 929000.00K
3.23B
4.16B
6.82B
- 7659000.00K
- 838000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
VZ
2023
2024
2025
2026
2027
$42.44
$89.37
$91.39
$93.45
$95.55