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Readers of this space know that one of the preferred plays is a utility company with a demonstrated business model, solid balance sheet, ample cash, decent dividend, and with an extra revenue stream / business that could provide additional growth. Verizon is one such company.
Verizon is not your typical, former AT&T (NYSE: T) unit. Verizon Communications (NYSE: VZ) is a modern, diverse telecom provider for the early digital age.
Verizon has three impressive divisions: landline, wireless, and business services. And the numbers speak for themselves: the landline unit has an astounding 41.4 million subscribers in 28 states, Verizon Wireless is the U.S.'s second largest wireless provider, and business services is making inroads on medium/large enterprise customers and government agencies.
Further, the company's fiber optic broadband/video service, FiOS emerged as a competitor to comparable cable broadband/video services: look for VZ to continue to grab market share in key markets, as the service is rolled-out in the years ahead. The Reuters F2008/F2009 EPS consensus estimates for VZ are $2.65/$2.92.
Further, the company's fiber optic broadband/video service, FiOS emerged as a competitor to comparable cable broadband/video services: look for VZ to continue to grab market share in key markets, as the service is rolled-out in the years ahead. The Reuters F2008/F2009 EPS consensus estimates for VZ are $2.65/$2.92.
Further. analysts see continued solid margins in VZ's wireless/data operations, offset somewhat by attrition in landline subscribers. Finally, a $1.72 dividend adds to the favorable company portrait.
The risks? An increasingly competitive mobile landscape represents the biggest challenge, including the pressure to add services as consumers request more services from their PDAs and next-generation devices.
The First Call mean rating for VZ is: Buy. [30 firms.] Mean 2008 target: $45. [high: $51, low: $36.]
Stock Analysis: Verizon is moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from VZ's shares. Sell / Stop Loss if you were to purchase shares in this company: $28.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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