NEW YORK (TheStreet) -- Shares of Verizon Communications (VZ) - Get Verizon Communications Inc. Report rallied to close higher by 2.78% to $46.98 in Monday's trading session on reports that Verizon may close on a deal to sell more than $10 billion in assets, including cellphone towers and parts of its wire-line business, Dow Jones reports.
The deal, which could be announced this week, involves multiple buyers, as Verizon works to cut down debt and cover the $10.4 billion it bid for licenses in last week's FCC wireless spectrum auction, Dow Jones added.
New York City-based Verizon is a holding company that is engaged in delivering broadband and other wireless and wire-line communications services to consumer, business, government, and wholesale customers.
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Separately, TheStreet Ratings team rates VERIZON COMMUNICATIONS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERIZON COMMUNICATIONS INC (VZ) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VZ's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, VERIZON COMMUNICATIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 56.61%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Diversified Telecommunication Services industry. The net income has significantly decreased by 144.0% when compared to the same quarter one year ago, falling from $5,067.00 million to -$2,231.00 million.
- The debt-to-equity ratio is very high at 9.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, VZ maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: VZ Ratings Report