Verizon iPhone: Where to Buy it

NEW YORK ( TheStreet) -- Want to buy a Verizon ( VZ) iPhone, but you didn't pre-order and you don't want to stand in line at the Apple ( AAPL) or Verizon store? Maybe you'd like to be efficient and make the trip to get the phone while picking up a few other things, like a loaf of bread. Think again.

The drama surrounding the arrival of the Verizon iPhone continued with trying to decipher which retail outlets would get to sell the device. Exclusive dealers soon found they weren't so exclusive; big-box stores that sell the AT&T ( T) version of the iPhone were suddenly secretive as to whether they were stocking the new phone.

Some stores did not announce they would be selling the product until just a few days ago.

Unfortunately, many customers will need to make a trip to the store. Verizon had to shut down its pre-order efforts when it ran out of the allotted number. JP Morgan analyst Phil Cusick suggested the company sold 500,000 units and Verizon said it sold more iPhones in the first two hours that any other phone on any other launch day. To put that in perspective, Apple sold 600,000 units on the first day of pre-orders for the iPhone 4 last year.

Not every store that carries the AT&T iPhone will be carrying the Verizon iPhone. Read on for the financial run-down on the stores that will definitely be selling the new version Thursday -- and those that might sell it in the near future.

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Wal-Mart ( WMT) confirmed that it would carry the Verizon iPhone starting Feb. 10. It was reported by Hot Hardware that it would only be in select Wal-Mart stores, but those locations haven't yet been announced.

Company Profile

Wal-Mart is the world's largest retailer with sales of $405 billion for the fiscal year ending in January 2010.

Income Statement

Wal-Mart reported in its last quarter that traffic and average ticket levels were both down in the U.S. market. The company also had negative comps in its electronics businesses. Unemployment in America and diminished paychecks are clearly impacting the typical Wal-Mart customer. Plus, the company is fighting fierce competition from dollar stores and Target ( TGT).

Balance Sheet

Wal-Mart has $10.6 billion in cash and cash equivalents and $51.5 billion in long term debt. The company pays a dividend of $1.21 a share. This is an indicated dividend of 2.1%, which is paying more than a five year Treasury that pays 1.5%.

Analyst Ratings

An average of 64.71% ratings on the stock are buys with an average price target of $60.91. The stock's price to earnings ratio of 13.91 implies a discount compared to its peer group average of 16.82 and a discount to the S&P 500 average of 18.19. Shares are up 3.9% year-to-date.

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Target has confirmed it will not be offering the Verizon iPhone in stores or online. However, it does sell the AT&T iPhone and is offering big discounts if customers want to trade in their 3G iPhone for an iPhone 4. The catch: customers must sign a contract for two more years with AT&T. Target has only been selling Apple's phones since last fall.

Company Profile

Target is the second-biggest discount retailer in the U.S. It has differentiated itself by associating its name with cutting-edge fashion, accessories and home goods designers and offering itself as a stylish alternative to Wal-Mart.

Income Statement

Target has proven itself to be tough competitor against Wal-Mart. The company is offering 5% discounts to Target card holders as a way to grab share. Target reported that its revenue increased 2.2% year-over-year during the last quarter and same stores sales increased 1.6%.

Balance Sheet

Target has $936 million in cash and cash equivalents and $16.5 billion in long term debt. The company pays a dividend of $1.00 a share for a yield of 1.8%

Analyst Ratings

An average of 80.77% ratings on the stock are buys with an average price target of $64.95. The stock's price to earnings ratio of 14.23 implies a discount compared to its peer group average of 23.40 and a discount to the S&P 500 average of 18.19. Shares are up 2.3% year-to-date.

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Best Buy ( BBY) will sell the Verizon iPhone starting Feb. 10. The retailer has been struggling to compete with free shipping monster Amazon ( AMZN) and smartphone sales have proven integral to Best Buy's survival.

According to the company's website, same store sales for home office supplies, of which mobile phones are part of, jumped 4.3% in December "as a result of a low double-digit increase in mobile phones, driven primarily by an increase in the mix of smartphones." With Verizon selling more iPhones in the first two hours of pre-orders than any other phone, Best Buy could make a killing with the new unit.

Company Profile

Best Buy is a 45 year-old international technology and entertainment retailer. It sells everything from Apple products to video games to TVs, cameras and washing machines. The company recently announced a new buyback program, in which customers can, for a fee, opt to sell back a smartphone or TV within a few months or years of purchase and get back up to 50% of the device's value.

Income Statement

Best Buy's third-quarter net income fell to $217 million, or 54 cents a share, from $227 million a year earlier. EPS was helped by a share repurchase program; less shares in circulation means the more each share can earn.

Net sales fell 1.1% to $11.9 billion, partially led by the addition of more stores which weakened same store comparisons. Gross profit margin grew 3%.

Balance Sheet

As of the third quarter, Best Buy had $1.2 billion in cash and cash equivalents down 5% from the same period a year earlier. The company also reported $1.8 billion in total debt, which is down 3% from a year ago. The company pays a 1.71% dividend or 15 cents a share. According to TheStreet ratings team, which has a buy rating on the stock, Best Buy could face financial difficulties over the short-term and might have issues meeting its cash needs.

Analyst Ratings

Best Buy currently has 12 buy ratings, 15 holds and an average price target of $40.62. The stock trades at a price to earnings multiple of 10.55, well below its peers. The stock returned negative 13.37% in 2010 and so far is up 1.51% in 2011.

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Radio Shack ( RSH) will most likely come up empty on the Verizon iPhone launch. Radio Shack offers post-paid rate plans from AT&T, Sprint ( S) and T-Mobile and sells some no-contract plans with other carriers -- but not Verizon.

There have been rumblings that Radio Shack might change the rules to land the Verizon iPhone, but a company representative said, "Radio Shack will not carry the Verizon iPhone at launch in its kiosk segment." The comment does leave some wiggle room for the company to carry the phones at its stores.

In its last quarterly report, the company said that it saw muted consumer spending since the end of 2008, but did see growth in the mobile phone industry and a huge inflow of smartphones into the market. The company said that sales in its wireless platform increased 25.8% in the third quarter compared to the same period a year earlier.

Company Profile

Radio Shack has 6,000 locations in the U.S. and Mexico including stores, outlets and kiosks. Although the company doesn't carry the Verizon iPhone, it can profit by buying back AT&T iPhones from customers desperate for the Verizon version -- Radio Shack will then offer credit towards a new item. Radio Shack could then sell that used phone to the wholesale market. Even a used iPhone 4 retail for as much as $300-$400.

Income Statement

Radio Shack's third-quarter net income rose to $46 million, or 37 cents a share, which is up 22% from a year earlier. The company is engaged in an aggressive share buyback program of $610 million with $200 million available for purchase at the end of September.

Net sales rose 6% to $1.1 billion but gross profit margin slipped 4.8%.

Balance Sheet

As of the third quarter, Radio Shack had $720.3 million in cash and cash equivalents down 16% from the same period a year earlier. The company also reported $677.8 million in total debt, which is down 1.4% from a year ago. The company pays a 1.64% dividend or 25 cents a share. According to TheStreet ratings team, which has a buy rating on the stock, Radio Shack is unlikely to face financial problems in the near future.

Analyst Ratings

The majority of analysts are neutral on the stock. Radio Shack currently has 13 hold ratings, 4 buys, 1 sell and an average price target of $17.82. The stock trades at a price to earnings multiple of 8.58, well below its peers. The stock returned negative 5.23% in 2010 and so far has fallen 14.92% in 2011.

Verizon iPhone Hub

--Written by Debra Borchardt and Alix Steel in New York.

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