Verizon Communications Inc. (NYSE:VZ), one of the world’s largest communication companies, has recently become the topic of discussion among investors. With an average recommendation of “Hold” from nineteen analysts covering the stock, Bloomberg Ratings reports eleven equities research analysts give a hold recommendation while five have suggested buying shares in the company.
The average 12-month target price among brokerages comes to $46.82, indicating that investors have a cautious approach towards Verizon despite its strong financial position. The company recently disclosed that it paid a quarterly dividend on May 1st, which was approximately $0.6525 per share. Shareholders of record were required to own shares by April 10th to be eligible for this payout, and the ex-dividend date was April 6th. This represents an annualized dividend amounting to $2.61 and a significant yield of 7.50%. Verizon Communications’ dividend payout ratio stands at present at 50.78%.
A number of hedge funds and other institutional investors have made changes to their positions in recent months with Empower Advisory Group LLC being the most recent addition with a new position valued at $85,316,000 acquired in Q1 of this year alone. Verity Asset Management Inc., on the other hand, raised its stake in Verizon Communications by 12.5% during Q1 adding up to 12,664 shares worth $492K after purchasing an additional 1,409 shares during the last quarter.
3Chopt Investment Partners LLC was another investor acquiring a new position in Verizon Communications during Q1 valued at $2,137,000 as well as Raleigh Capital Management who raised their stake by 3.6% owning over 93K shares presently valued at $3,652M having purchased an additional 3,302 shares in Q1 alone.
Finally, Arete Wealth Advisors LLC also acquired a new position in Verizon Communications worth $2,347,000 in Q1. As it stands, hedge funds and other institutional investors own 60.96% of Verizon’s stock.
In conclusion, the hold recommendation from analysts is an indication that Verizon Communications is still an attractive investment for many investors. Despite tough competition in the telecommunications market, dividends paid to shareholders remain high over time, making this a good choice for those who value steady income streams. Meanwhile, the addition of new positions by institutional investors indicates that they are confident in their long-term strategy with Verizon Communications’ stocks, which could possibly have significant implications on future trading volumes and prices.
Verizon Communications: Outlook and Challenges for Investors
Verizon Communications: An Overview of Recent News and Analysis
According to a number of equities analysts, Verizon Communications (NYSE:VZ) has been rated an “outperform”, with varying target prices that range from $41.00 to $46.00 per share. This American telecommunications company, whose core business is providing wireless services and products, is still considered to be an attractive prospect for investors; however, it has recently experienced both corporate insider selling and reduced target prices from some financial institutions.
In May 2017, one of the company’s executive vice presidents (EVP), Joseph J. Russo, sold over 7,500 shares in the company, while CEO Kyle Malady also sold over 7,000 shares back in March. According to reports filed with the Securities & Exchange Commission (SEC), these transactions were accomplished at prices ranging from $36.30 to $36.50 per share.
Despite insider selling, the company did pay out a quarterly dividend in May at a rate of $0.6525 per share – representing an annualized dividend yield of 7.50%. While most established institutional investors would consider this dividend payout ratio as acceptable under current market conditions at first glance (at approximately 51%), some equity analysts point out that this may indicate declining profitability for Verizon Communications over time.
Although Verizon Communications announced EPS of $1.20 for Q1 2017 on April 25th – just beating analysts’ expected earnings by $0.01 – its revenue came in below expectations at $32.91 billion compared to a consensus estimate of $33.64 billion.This result was attributed to weaker than anticipated revenues generated by legacy landline businesses due to increased competition from wireless alternatives.
At present, Verizon shares are trading around their one-year low at approximately$34 per share on NYSE:VZ,and there are concerns among some investment research firms about possible future earnings downgrades. This is due to the firm’s increased cash outflows for building its 5G network, which may affect future dividend payments and slow down share-price growth.
In summary, Verizon Communications is still considered by many as a valued investment; however, there are some reservations that need to be scrutinized before investing in this stock. Investors should consider paying attention to these issues in order to make informed decisions about purchasing or selling shares in this company.
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