NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
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Highlights from the ratings report include:
- VZ's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 17.2% when compared to the same quarter one year prior, going from $1,439.00 million to $1,686.00 million.
- Net operating cash flow has increased to $5,957.00 million or 18.31% when compared to the same quarter last year. In addition, VERIZON COMMUNICATIONS INC has also vastly surpassed the industry average cash flow growth rate of -39.05%.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 59.90%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.00% trails the industry average.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
Verizon Communications Inc. provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. It operates in two segments, Verizon Wireless and Wireline. The company has a P/E ratio of 47.3, above the average telecommunications industry P/E ratio of 46.8and above the S&P 500 P/E ratio of 17.7. Verizon has a market cap of $124.86 billion and is part of the
industry. Shares are up 8.8% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.