"Sometimes it takes a while for the market to recognize a company's achievements. When it ultimately does, however, the result is super-charged returns," says Roger Conrad, editor of The Utility Forecaster.
"Over the past decade, few companies have risen as quickly to dominate their industries as Verizon Communications (NYSE: VZ)." Here is the advisor's review.
"Verizon began its ascent with a series of mergers, combining with the former NYNEX, GTE and finally MCI Communications. It simultaneously unified its wireless operation with that of Vodafone, keeping 55% of the venture known as Verizon Wireless.
"Since then, Verizon Wireless has grown rapidly and today boasts the biggest consumer network in the US, along with the lowest turnover and highest margins. The former MCI coupled with Verizon's former business operation continues to expand globally.
"Even the wireline division -- which is steadily losing customers to competitors, including the company's own wireless service -- is finding new life upselling broadband services.
"That operation is also getting a real lift from the construction of Verizon's FiOS network, which is capable of providing all manner of communications and entertainment services at lightning speeds and far more cheaply than the old copper network.
"Earnings growth of nearly 35% in the second quarter fueled a solid 6.3% dividend increase this summer. The company is on track for even stronger results for the rest of the year and beyond. Its balance sheet is extremely solid; debt interest was actually cut 22.8% despite some $8.5 billion in capital expenditures during the quarter.
"Like all dominant companies, Verizon faces constant regulatory challenges. The latest is a battle over so-called open access to its network, sought by major Internet companies such as Google.
"The company's army of lobbyists doesn't win every battle, but it's definitely been winning the war, as the company continues to fight off threats to its growth. As for technological challenges, it's become ever-faster at adopting what works, particularly in its wireless Internet push.
"Despite a solid run over the past two years, the stock is still cheap, selling for just 1.4 times sales and paying a yield of nearly 4%. Buy Verizon Communications up to 45."
Each day, Steven Halpern's TheStockAdvisors.com features the latest stock picks and investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
10-15-2007 @ 10:27AM
paul said...
Steven, I'm a little confused by your recommendation. You say buy VZ "up to 45" but the stock has been over 45 since January. What am I missing?