Broker Darlings of the Dow: Verizon Communications Ranks As a Top 15 Analyst Pick

A study of analyst recommendations at the major brokerages shows that Verizon Communications Inc (VZ) is the #5 broker pick, on average, out of the 30 stocks making up the Dow Jones Industrial Average, according to ETF Channel. Verizon Communications Inc also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #76 spot out of 500.

In forming this rank, the analyst opinions from the major brokerage houses were tallied, and averaged; then, the underlying components were ranked according to those averages. Investors often interpret analyst opinions from different angles — a popular analyst pick could mean that many sharp minds individually came to the same bullish conclusion, and therefore the stock should do well, but it could also mean that if the company stumbles, that would come as a negative surprise.

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The Top 15 Broker Darlings of the Dow: Current Top Analyst Picks »

From the other direction, when companies have a low rank among analysts, it isn't necessarily the case that investors should conclude that the stock will perform poorly. It can, of course, but a bullish investor could also take the contrarian angle and read into the data that there is lots of room for upside because the stock is so out of favor.

For these reasons, we at ETF Channel find value to putting together these rankings, because both the top and the bottom ends of the lists can often make for some interesting stock picking ideas for further research.

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15 Forgotten Giants of the S&P 500: Analysts' Current Least Favorites »

Below is a chart of rank over time: Loading+chart++2014+TickerTech.com

According to the ETF Finder at ETF Channel, VZ makes up 22.13% of the Vanguard Telecommunication Services ETF (VOX) which is trading higher by about 0.4% on the day Tuesday.

VZ operates in the Communications Services sector, among companies like AT&T Inc (T) which is up about 0.2% today, and China Mobile Limited (CHL) trading higher by about 0.2%. Below is a three month price history chart comparing the stock performance of VZ, versus T and CHL.

VZ,T,CHL Relative Performance Chart

VZ is currently trading up about 0.7% midday Tuesday.

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