-0.61 | -1.16%
VERIZON COMMUNICATIONS INC's gross profit margin for the first quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. VERIZON COMMUNICATIONS INC has weak liquidity. Currently, the Quick Ratio is 0.57 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.
During the same period, stockholders' equity ("net worth") has decreased by 9.16% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
| Income Statement | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Net Sales ($mil) | 29420.0 | 28242.0 |
| EBITDA ($mil) | 10340.0 | 9223.0 |
| EBIT ($mil) | 6222.0 | 5195.0 |
| Net Income ($mil) | 1952.0 | 1686.0 |
| Balance Sheet | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 6135.0 | 6532.0 |
| Total Assets ($mil) | 226186.0 | 222921.0 |
| Total Debt ($mil) | 52881.0 | 51597.0 |
| Equity ($mil) | 33310.0 | 36671.0 |
| Profitability | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Gross Profit Margin | 62.84 | 59.92 |
| EBITDA Margin | 35.14 | 32.65 |
| Operating Margin | 21.15 | 18.39 |
| Sales Turnover | 0.52 | 0.5 |
| Return on Assets | 0.5 | 1.18 |
| Return on Equity | 3.42 | 7.22 |
| Debt | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Current Ratio | 0.8 | 1.03 |
| Debt/Capital | 0.61 | 0.58 |
| Interest Expense | 714.0 | 753.0 |
| Interest Coverage | 8.71 | 6.9 |
| Share Data | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Shares outstanding (mil) | 2861.0 | 2841.0 |
| Div / share | 0.52 | 0.5 |
| EPS | 0.68 | 0.59 |
| Book value / share | 11.64 | 12.91 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 1.3456695E7 | 1.3119907E7 |
BUY. VERIZON COMMUNICATIONS INC's P/E ratio indicates a significant premium compared to an average of 47.89 for the Diversified Telecommunication Services industry and a significant premium compared to the S&P 500 average of 19.08. For additional comparison, its price-to-book ratio of 4.57 indicates a significant premium versus the S&P 500 average of 2.44 and a significant premium versus the industry average of 2.67. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, VERIZON COMMUNICATIONS INC proves to trade at a premium to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| VZ 133.00 | Peers 47.89 | VZ 4.61 | Peers 4.95 | |||||||||||||||||||||
|
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations. VZ is trading at a significant premium to its peers. |
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. VZ is trading at a valuation on par to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| VZ 16.63 | Peers 15.54 | VZ 0.17 | Peers 1.28 | |||||||||||||||||||||
|
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations. VZ is trading at a premium to its peers. |
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. VZ trades at a significant discount to its peers. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| VZ 4.57 | Peers 2.67 | VZ -57.45 | Peers 21.79 | |||||||||||||||||||||
|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. VZ is trading at a significant premium to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, VZ is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| VZ 1.30 | Peers 1.69 | VZ 4.36 | Peers 0.82 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. VZ is trading at a discount to its industry on this measurement. |
Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share. VZ has a sales growth rate that significantly exceeds its peers. |
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