Verizon Communications Inc
🇺🇸 VZ · NYSE/NASDAQ · US92343V1044
Telecom
USD 46.37 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
11.3
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 46.37 ÷ 4.10 = 11.3
TTM period through: 2026-03-31
Forward P/E (estimated): 9.5
Based on analyst estimates
Reference: Provider P/E (Trailing): 11.5
Yield (Fwd)
6.10%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 5.86%
Div. Growth (5Y CAGR)
1.9%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
3.9x
Latest quarter: 13.8x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 13.8x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
69.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 66.5%
Cash Flow Payout (TTM): 30.9%
FCF Coverage (TTM): 1.74x
ROE
17.2%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
7.9x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Verizon is a dominant US telecommunications provider operating in a stable oligopoly, delivering essential digital infrastructure and highly predictable cash flows. Trading at $46.37, the stock sits well below our fair value estimate of $86-129 (P/FFO of 5.4x), representing significant upside to fair value. Worth considering for new positions at current levels, as the exceptionally secure 5.86% yield provides robust income while waiting for macro conditions to stabilize.
Sector Context
Verizon operates in the telecommunications sector, providing essential wireless, internet, and data services to millions of consumers and businesses. This sector is characterized by massive physical infrastructure, high regulatory barriers, and stable oligopolies, making metrics like P/FFO and cash flow coverage highly relevant due to heavy but non-cash depreciation expenses.
Temporary Opportunity Identified
Broad market sell-off driven by inflation and rate fears, combined with negative sentiment from manageable legal headwinds (FCC fines, consumer settlements) that do not impair long-term free cash flow generation.
📊 Strategy Analysis
- • Trading at $46.37 with a P/FFO of 5.4x, sitting well below the fair value range of $86-129, indicating significant undervaluation for its infrastructure assets.
- • The 5.86% dividend yield is highly secure and well-covered by free cash flow, with a Cash Flow Payout ratio of just 30.9%.
- • Verizon operates as part of a dominant telecom oligopoly, providing essential digital infrastructure with predictable, recurring revenue streams.
⚠ What to Watch
- • Net Debt/EBITDA of 3.85x exceeds the standard conservative 3.0x threshold, which increases vulnerability to interest expenses, though customary for capital-intensive telecommunications.
- • Historical earnings show a 5-year EPS CAGR decline of 5.3%, requiring successful execution of cost-cutting and 5G monetization initiatives.
- • Ongoing legal headwinds, including Supreme Court litigation over FCC privacy fines and consumer class action settlements, generate negative sentiment.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.