Verizon Communications (VZ)
Background: Verizon is the largest providers of wireline and wireless communications in the United States. Verizon is also the world's largest provider of print and on-line directory information.
Price To Book: 4Earnings Payout Percentage: 63% Verizon has an eye-popping 4.4% yield, but what most catches my attention is the chart pattern. After a relatively large selloff in price, Verizon is on sale and breaking above the 200-day moving average again. In fact, on Monday, shares opened above the widely followed technical indicator, tested the support at the low and moved up again to close near the open. From a technical analysis point of view, this is what we want to see for the second break above the moving average. I've been highly bullish on Sprint (S) and AT&T (T) with strong results, and now my focus is on gaining this dividend at a price I expect will prove profitable. For investors who bought a year ago, Verizon has already performed well with a gain of 16%, plus dividends received. Analysts peg the one-year estimated share price at $53.82; however, I believe we may see another dividend hike within that time and a price closer to $55. Verizon last raised the dividend about a year ago after doing so about two years ago during its November payments. The last reported short interest is paltry and without reason to consider it a meaningful influence. Only 1.6% of the average trading float is shorted. Not unlike Pfizer, Verizon's small short interest is a green light to jump in the water. Verizon, AT&T, and Sprint have new competition selling Apple's (AAPL) iPhone now that Apple and Wal-Mart (WMT) have expanded sales into the Wal-Mart stores (Wal-Mart already sold iPhones through Sam's Club), but the carriers make their money on services, not hardware, so the net effect should be minimal and not a material reason to adjust the investment thesis. If you want to know my thoughts on Apple's sales channel expansion, take a look at Apple Can See the Future by Looking at the Past. VZ Payout Ratio TTM data by YCharts
At the time of publication the author had no position in any of the stocks mentioned. Follow @RobertWeinstein This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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