Verizon Stock: Should You Buy Before Q4 Results?

Posted On January 24, 2018 3:25 pm

Verizon Communications Inc. (NYSE:VZ) shareholders are on tenterhooks as the company is slated to announce fourth quarter results on Tuesday. The Wall Street expects Verizon’s revenue in the quarter to come in at $33.28 billion, a 3% increase year-over-year.

Verizon stock fell last week after investment research firm MoffettNathanson downgraded it from “Buy” to “Neutral” amid a risk of high inflation in the future following tax cuts.  The firm said in its report that analysts will shift their focus from high dividend yield stocks like Verizon to dividend growth stocks. However, Moffett increased his price target for Verizon stock to $51 from $56.

Despite the bearish report, Verizon remains the dividend aristocrat in the industry. The company has a dividend yield of 4.4%, which beats almost every competitor. Verizon’s 3-5 year annual dividend growth is 3%, which beats inflation. The company’s wireless business is getting stable. In the third quarter, Verizon’s wireless average revenue per account increased to $136.31 from $134.89 recorded in the previous quarter.

Verizon stock is still an excellent investment option for both short and long term investors. Verizon is up over 17% over the last six month despite the bearish trend in the telecommunication industry. Analysts think that Verizon shares will gain value, as the company is set to earn more revenue following the repeal of net neutrality laws. Last year, Verizon re-launched unlimited data plans that cost $80 for an individual line.  This move immediately boosted the company’s revenue in the second and third quarter.

Verizon recently announced that it was backing AT&T’s Open Networking Automation Platform. Analysts think that this move will cut Verizon’s reliance on Cisco, Juniper and NetScout. Verizon also said that the virtualization from the new platform will save it $10 billion in annual costs by 2020.

Verizon is also upping its content game. In December, the company signed a $2.5 billion deal with National Football League. The deal gives Verizon the ability to stream live NFL games on its websites and platform for no less than five years. NFL games streaming will bring in a huge revenue and advertisement for Verizon.

Verizon is also working on the 5G technology in order to become a pioneer in an industry which would have a worth of about $34 billion by the end of 2020. The company recently started Open Innovation lab in New York’s Silicon Alley to work with startups and academics to explore more projects and possibilities using Verizon’s pre-commercial 5G technology.

 Related: Here’s Why Facebook’s Dip is Your Buying Opportunity

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