Dow Jones Industrial Average 16,409, ( Way UP), Week ending 04-18-2014
Verizon Communications, Inc. (Symbol VZ, $47.60) is not a stock you would normally expect to see in this venue. The fact of the matter is, though, that once Verizon purchased the other half of Verizon Wireless that they did not own from Vodaphone, they suddenly became a major cash generating machine. They made the purchase with really cheap money and it did not really cause a problem to their balance sheet.
The price of the stock has never really reflected the impact of this tremendous asset purchase.
Let's talk first about Free Cash Flow: $5.484 Billion dollars. Also with that, you still get your 4.5% dividend payment every quarter. The PE on the stock is only 11.99. The company has an IBD earnings rating of 83.
My key measures Return on Equity of 34.5% which is excellent and a PEG Ratio of 1.30, also very good. Verizon operates at a Gross Profit margin of 61.49%. The company is currently sitting on $53.5 billion dollars in Cash and Cash equivalence.
Earnings for 2014 are growing at a rate of 23.83%. 2013 earnings per share was $2.80 per share. 2014 earnings are projected at $3.50 per share and $3.85 per share for 2015. Verizon reports earnings on Thursday and they are projecting .85 cents per share for the quarter.
Verizon has partnered with Redbox for an instant streaming package to compete with Netflix and others.
19 analysts have a Buy rating on the stock. The one Year return on the stock is (-8.17%), so you are getting a bargain here.
Some other interesting numbers: The company has a Market Capitalization of $198 Billion, but has an Enterprise Value of $293 Billion. There seems to be a disparity of value being recognized here. Time is working in Verizon's favor, and yours, if you own the stock.
So, I think you you can see the potential here and get 4.5% while you wait for it to happen.
I would buy the stock and get plenty of sleep at night. I think you can expect a 12 -15% annual total return from this one.
Hope you have a great week. All the best with your intelligent stock trades,
Freewilly
The price of the stock has never really reflected the impact of this tremendous asset purchase.
My key measures Return on Equity of 34.5% which is excellent and a PEG Ratio of 1.30, also very good. Verizon operates at a Gross Profit margin of 61.49%. The company is currently sitting on $53.5 billion dollars in Cash and Cash equivalence.
19 analysts have a Buy rating on the stock. The one Year return on the stock is (-8.17%), so you are getting a bargain here.
Some other interesting numbers: The company has a Market Capitalization of $198 Billion, but has an Enterprise Value of $293 Billion. There seems to be a disparity of value being recognized here. Time is working in Verizon's favor, and yours, if you own the stock.
So, I think you you can see the potential here and get 4.5% while you wait for it to happen.
I would buy the stock and get plenty of sleep at night. I think you can expect a 12 -15% annual total return from this one.
Hope you have a great week. All the best with your intelligent stock trades,
Freewilly
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