And then we have our unique model with our mix and match and how we deal with partners, things like Disney+, discovery+, Apple Music, et cetera. We have been developing that for the last two years and have a head-start with anybody else. Then, of course, the network monetization we're doing where we actually have other brands using the network in order to have the best return on investment which, for example, some cable operator.Īnd then the third one is the 5G mobile edge compute, where I would say, we're basically alone still. This catalyst was noted by Verizon’s CEO during the Communacopia conference in September, as seen below:įirst of all is the 5G adoption, which is everything from the mobility case, consumers and business and then fixed wireless access on 5G. This could be of significance for VZ down the road, as 5G is expected to revolutionize the way devices interact with each other and could necessitate far more connections than what are being used at present. Looking forward, I see VZ getting strong momentum from its head start in the 5G space. These results were driven, in part, by 528K retail postpaid net additions, resulting in 121 million total retail connections. Top-line second quarter revenue grew by a healthy 11% YoY, and considering that last year was weak due to the pandemic, it’s worth noting that revenue grew by a healthy 6.7% on a 2-year stacked basis. This is considering VZ posting a record adjusted EPS of $1.37 during the second quarter, and with adjusted EBITDA growing by a strong 5.6% YoY. Plus, I don’t see anything in Verizon’s business fundamentals to be concerning. It seems that the market has overreacted, however, as a $1 drop in target has led to a $4 drop in share price, with Barclays’ price target sitting well above the share price. The catalyst for the price drop appears to be rather weak, as it appears to be related to a Barclays analyst trimming its price target on Verizon from $56 to $55, due to tweaking of the analyst’s financial model to account for expenses and closing the Yahoo deal. As seen below, VZ carries an RSI score of 22.6, indicating that the stock is well in oversold territory. VZ now trades materially below its near-term high at the $58-level to just $51.35 at present. This is reflected in the steady drop in VZ’s share price since May, and the material drop this week. It appears, however, that VZ is getting no love from the market. I view industry consolidation via the merger between Sprint and T-Mobile as being a good thing for the incumbents, as it leads to reduced price competition due to having one less competitor, especially considering the fact that Sprint was aggressive on pricing and promotions due to its perceived lower quality network at the time. It serves over 90M postpaid and 4M prepaid wireless customers, and connects 25M data devices through its nationwide network. telecoms, sitting ahead of competitors AT&T ( T) and T-Mobile ( TMUS), with approximately a 40% market share of the postpaid phone market. Verizon is the biggest of the 3 largest U.S. In this article, I highlight why this presents a good entry point for strong and stable income from this telecom giant, so let’s get started. This brings me to Verizon ( NYSE: VZ), which is undergoing one of those valleys at the moment, pushing its dividend yield now to 5%. As one can well imagine, those investors who make the most money on telecom stocks are the ones who buy at the valleys rather than the peaks. This goes for the perceived slow-growing and stable telecom stocks as well. Nearly all stocks go through periods of over- and undervaluation, due to investor exuberance and pessimism.
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