Verizon: Solid Q3 Made 10x P/E & 4.9% Dividend Yield A Bargain

(Preview) Company Update (VZ US) (Buy)

Summary

• Verizon had a solid Q3, with revenues up 5.5% year-on-year (excluding Verizon Media), and 2021 EPS growth outlook was raised to 9-10%.

• In the large Consumer segment, Wireless and Wireline net adds both continued to improve, and EBITDA grew 2.0% year-on-year.

• In the smaller Business segment, EBITDA was sequentially stable, with growth in Wireless offsetting a small decline in legacy Wireline.

• 30%+ of Consumer Wireless accounts are now on premium unlimited, and group fixed wireless customers grew another 55K to 150K.

• At $52.35, Verizon stock has a 10x P/E and a 4.9% Dividend Yield. We expect a total return of 61% (16.0% annualized) by end of 2024. Buy

Introduction: Why is Verizon Stock Up?

We review our Verizon Communications Inc. (NYSE:VZ) investment case after Q3 2021 results were released this morning (October 20). At the time of writing (8:30 pm EST), Verizon stock was up 2.3%.

We initiated our Buy rating on Verizon last month. Since then VZ stock has fallen 3.8% and is down 8.6% in…