Verizon Share Forecast February 2022 – Time to Buy VZ?
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Shares of American multinational telecommunications conglomerate Verizon (NYSE: VZ) are in the green today, after closing at $53.80 as of February 2nd (19:59 EST). Verizon had spent $52.9 billion C-Band spectrum for 5G networks in March 2021. Verizon shares are now trading in a deep-value territory with enormous growth potential. Verizon’s full-year earnings per share (EPS) is $5.32, compared to $4.30 in the same period in 2020.
Verizon – Technical Analysis
According to Verizon’s financial statement, the market cap of the company stands at $225.852 billion with total assets worth $366.596 billion. Revenue for 2021 was at $133.61 billion with a profit margin of 16.51% compared to $128.29 billion.
Oscillators such as Relative Strength Index (14)(58.39), Stochastic %K (14, 3, 3)(78.13), Commodity Channel Index (20)(73.99), Average Directional Index (14)(14.76) and Awesome Oscillator(−0.32) are neutral. Moving averages such as Exponential Moving Average (10)(52.98), Simple Moving Average (10)(52.78), Exponential Moving Average (20)(52.92) and Simple Moving Average (20)(53.22) are indicating a buy action.
68% of all retail investor accounts lose money when trading CFDs with this provider.
Recent Developments
As mentioned before, Verizon spent a heft $52.9 billion on the C-Band spectrum for 5G networks. While some investors were sceptical at the time, things were clearer once the company made a subsequent announcement. Verizon said that they will be able to provide 5G services to 100 million people this month. It is also offering 5G Home plans for as little as $50 per month which aims to replace the physical internet connections that have been standard for decades.
Verizon won the spectrum auctions back in 2021. At the time the company’s management hoped that the company could offer fixed wireless household coverage to 50 million people by the end of 2025. But this timeline has been beaten by a wide margin with the latest announcement of covering 100 million people in January 2022. Verizon’s expansion into this area will be a big challenge for cable companies like Comcast and Charter Communications (NASDAQ: CHTR).
Verizon has achieved 106,000 total broadband net additions from Fios and DSL. This is an increase of 30,000 total broadband net additions over 2020. Verizon acquired TracFone Wireless whose revenue in the fourth quarter was up $700 million compared to 2020.
Should You Buy VZ Shares?
Verizon has increased its quarterly dividend by 2% last year to $0.64 per share. This made 2021 the 15th consecutive year it has increased its dividend. At the current price, VZ shares have a dividend yield of 4.82% with a cash payout ratio of 46.04%. The long-term average P/E ratio is between 14 and 15, so shares are attractively valued at the moment.
Verizon is expected to continue its 2021 performance well into the future, especially with the advent of 5G. More than a quarter of its consumer base was using a 5G-enabled device in Q3, up from about 20% in Q2. This resulted in a 4.8% year-over-year increase in 2021 equipment sales through three quarters. The arrival of 5G also triggered people to upgrade their data plans. More than 30% of service providers’ accounts were on higher-priced unlimited data plans at the end of Q3.
Compared to $16.4 billion the year prior Verizon earned $17.1 billion in wireless service revenue in Q3. It has set forecasts to achieve further growth in 2022 and beyond as 5G network expansion and adoption continues. Verizon has a reliable dividend with a steady track record of increases which makes it a hedge against inflation. Thus it is a compelling long-term stock to buy for any investor.
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