Editor's Note: 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.
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 high debt management risk by 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 0.5%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 15.8% when compared to the same quarter one year prior, going from $1,686.00 million to $1,952.00 million.
- Net operating cash flow has increased to $7,531.00 million or 26.42% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.56%.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 62.80%. 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 6.63% trails the industry average.
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 25.70% which was in line with the performance of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
Verizon Communications Inc., through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses, and governmental agencies worldwide. Verizon has a market cap of $150.8 billion and is part of the technology sector and telecommunications industry. The company has a P/E ratio of 127.00, above the S&P 500 P/E ratio of 18.00. Shares are up 17.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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