Verizon Communications Inc

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VZ : NYSE : Technology
$49.81 | %
Today's Range: 49.6 - 50.32
Avg. Daily Volume: 1.45855E7
12/02/16 - 4:04 PM ET

Financial Analysis


VERIZON COMMUNICATIONS INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. VERIZON COMMUNICATIONS INC has weak liquidity. Currently, the Quick Ratio is 0.70 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 55.73% 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.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)30937.033158.0
EBITDA ($mil)10482.011544.0
EBIT ($mil)6540.07535.0
Net Income ($mil)3620.04038.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)6441.04181.0
Total Assets ($mil)239498.0242073.0
Total Debt ($mil)106591.0112324.0
Equity ($mil)20460.013138.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin60.4759.87
EBITDA Margin33.8834.81
Operating Margin21.1422.72
Sales Turnover0.530.54
Return on Assets5.854.23
Return on Equity68.5378.07
Debt Q3 FY16 Q3 FY15
Current Ratio0.850.63
Debt/Capital0.840.9
Interest Expense1214.01386.0
Interest Coverage5.395.44


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)4076.634068.87
Div / share0.570.55
EPS0.890.99
Book value / share5.023.23
Institutional Own % n/a n/a
Avg Daily Volume1.3793713E71.3410468E7

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 21.23 for the Diversified Telecommunication Services industry and a significant discount compared to the S&P 500 average of 25.16. For additional comparison, its price-to-book ratio of 9.53 indicates a significant premium versus the S&P 500 average of 2.79 and a significant premium versus the industry average of 3.98. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, VERIZON COMMUNICATIONS INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
VZ 13.91 Peers 21.23   VZ 6.94 Peers 6.60

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

VZ is trading at a significant discount 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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
VZ 11.87 Peers 19.97   VZ NM Peers 1.80

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

VZ is trading at a significant discount to its peers.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VZ 9.53 Peers 3.98   VZ 37.05 Peers 92.68

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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VZ 1.52 Peers 1.77   VZ -2.05 Peers 8.99

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

VZ significantly trails its peers on the basis of sales growth

 

 

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