Verizon Communications Inc (VZ)

[Nebuchadnezzar]

$VZ-easy money. will be trading this one again for a while as it will be volatile btwn $54-$60

[FUNMAN]

IMO VZ is a better managed, operational, and stock performer than T. That said, I've been a long time "income-owner" of both companies for those very attractive and safe dividends.

Porterhouse10 Wednesday, 02/17/21 07:10:48 AM
Re: FUNMAN post# 1970
Post # 1973 of 1973

Looks like Warren Buffet filed he been buying VZ and Chevron and ditching JP Morgan and shedding 6% of APPLE, good for us normal folks!

He bought 146mill in VZ his quarterly dividend will be 90mill haaa

[Porterhouse10]

Looks like Warren Buffet filed he been buying VZ and Chevron and ditching JP Morgan and shedding 6% of APPLE, good for us normal folks!

He bought 146mill in VZ his quarterly dividend will be 90mill haaa

[Porterhouse10]

I'm with ya bought more today, been buying for weeks on this downtrend, wait it out and grab the DIVI, was hoping for $66-$68 by years end jmo

[mattw69]

I own vz, but this looks like a place for me to grab more. Dividend looks good

[FUNMAN]

I will probably die holding VZ. Hopefully that's many years in the future.

[Porterhouse10]

Still adding, long hold, getting ridiculous, if she has any strength she'll hold $54, might dip below intraday, but like to see 54 hold

[FUNMAN]

Makes little sense. Love the dividend.

[Porterhouse10]

Nice financials and news, price goes down, adding here at these levels and have been.

[FUNMAN]

Verizon: Brace For A $40 Billion Bill
Jan. 19, 2021 4:27 PM ET

https://seekingalpha.com/article/4399742-verizon-brace-for-40-billion-bill?utm_medium=email&utm_source=seeking_alpha&mail_subject=vz-verizon-brace-for-a-40-billion-bill&utm_campaign=rta-stock-article&utm_content=link-0

Stone Fox Capital Out Fox the market with misunderstood, high reward opportunities

Summary

Verizon appears the biggest bidder at the just-completed C-band auction with a total estimated bill of up to $40 billion.

The wireless giant already has over $106 billion in net debt and needs to pay for Tracfone as well.

The stock is stuck below $60 as the company fails to offer meaningful growth while paying a hefty bill for spectrum.

Looking for a helping hand in the market? Members of Out Fox The Street get exclusive ideas and guidance to navigate any climate. Get started today »

The 5G spectrum auction just ended with an incredible bill due to the domestic wireless providers like Verizon Communications (VZ). These companies already had large debt loads and so far have failed to charge much in the way of premium prices for access to 5G networks. My investment thesis is even more negative on this stock following the wireless giant spending upward of $40 billion on spectrum at the latest FCC auction.

Verizon logo
Image Source: Verizon website

Massive Auction
On Jan. 15, the 5G wireless spectrum auction ended with a total of $80.9 billion in bids for the C-band spectrum. A lot of the original analyst estimates had the auction only spending in the $30 billion range and now Verizon alone could've spent far in excess of that amount and possibly as much as the prior record FCC auction of $44.9 billion.

The auctions started on Dec. 9 and the FCC will unveil the winning bidders in February or early March. With a combined $13.0 billion in reallocation costs and incentive payments for the spectrum from satellite operators, the total costs to the wireless providers were ~$94 billion.

By most analyst estimates, Verizon has been the biggest spender in these auctions. UBS analyst John Hodulik estimates the wireless giant could spend an incredible $45 billion on the auction.

Previously, Raymond James had estimates of total costs to Verizon of $35 billion before the holiday break. Afterwards, another $11 billion in bids occurred which could easily push the Verizon bidding beyond $40 billion.

Cowen has the following estimates for just the spectrum spending:

Verizon: $35 billion
AT&T: $20 billion
Cable: $10-15 billion
T-Mobile: $10-15 billion
Dish: $0-5 billion
While Verizon needs the mid-band spectrum to compete in 5G with T-Mobile (TMUS) following their spectrum haul in the acquisition of Sprint, the move isn't a good sign for the stock. No other industry requires competitors to spend billions upon billions to just obtain the license to upgrade services. Imagine if Apple (AAPL) had to bid $40 billion every couple of years to offer the latest iPhone or Tesla (TSLA) had to bid an insane amount to offer an SUV EV.

Wells Fargo even estimates Verizon will spend $34 billion on the C-band auction and T-Mobile will still have 60% more spectrum in the low- and mid- band areas after the auction. In essence, Verizon may have spent double their initial plans and still end up short in spectrum holdings compares to T-Mobile.

Debt Impact
Verizon was already spending $3.125 billion on the Tracfone deal and the 5G spectrum auction will further tax the balance sheet. The company will surely have to pay over $40 billion in cash for these two transactions while the net debt levels were already at $106.6 billion.

Verizon will approach net debt levels of $150 billion after these transactions are paid. The company will actually have the same debt levels of AT&T (T) prior to their recent debt raise of $14 billion to fund part of their portion of the spectrum spending.

ChartData by YCharts
With Q3 interest expense of $1.044 billion, Verizon is paying ~3.6% interest rates on $115.6 billion in outstanding debt. At these rates, the additional debt could add $360 million in quarterly interest expense, or up to $1.44 billion annually.



Source: Verizon Q3'20 presentation

Verizon entered Q4 with $10.7 billion in free cash flow above dividend payments this year. The wireless giant isn't going to face any crisis where the dividend needs to be cut in the near term, but the free cash flow levels will decrease.

The main issue is the lack of financial flexibility, if something goes wrong in the business or interest rates rise. The company will be burdened with repaying debt for years, instead of investing in the business.

Takeaway
The key investor takeaway is that the stock has failed to trade beyond $60 due to the high expenses and low returns from 5G wireless investments. Analysts don't forecast long-term revenue growth in excess of 1%-2%, yet the company just spent an estimated $40 billion to acquire spectrum in order to remain competitive. Investors should avoid Verizon as the stock still appears headed for years of weakness due to the low dividend yield and high debt balance.

Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[77Port]

The setup seems to be dividend Vz as underdog to growth-oriented Tmus. Can VZ thread the needle toward growth and not get distracted by the sideshows? If so, then maybe Cramer can give VZ something other than an old folks dividend recommendation. Tmus is double the SP to VZ. In this setup, VZ seems like close to a sure bet, assuming they keep their head in the game. If they do, maybe they find a surprise for us.

[Porterhouse10]

And $56 held, loaded all week, but we shall see

[Porterhouse10]

If it has any strength it will bounce off $56

[Porterhouse10]

Buying in this range

[77Port]

If VZ can buy outright, or partner to obtain enough next gen bandwidth to run the topline 5G, then VZ sp will blast off.

[conix]

VZ Chart

[conix]

VZ is basically a bond surrogate with a nice dividend and no real fears for long term capital loss potential. So you just collect the dividends and not expect much beyond the "better than money market" yield

JMO

[Spicknspan]

VZ has just been a dividend play with no cap appreciation

[Seeker213]

VZ like T talk a great game but nothing ever becomes of it. You have Yahoo and AOL and basically have done absolutely nothing to grow a sector that’s going wild, think Snap, Facebook and Twitter. I don’t get the reasoning behind them doing nothing, or no plans of doing anything. Maybe, spin them off and let them sink or swim. Selling HUFF post instead of of utilizing their contributions is another blown opp. VZ management is a bunch of old good olde boys who sit back and simply collect a pay check instead of being aggressive. I’m sure most will agree.

[MikeBK205]

AffordableTv .com

Promo Code: Facebook

[whytestocks]

NEWS: $VZ Verizon's 4.4% Dividend Yield Remains One of the Best in Tech

Though shares have turned in an unimpressive negative 6% return this year, Verizon 's (NYSE: VZ) business has been a stable staple. That was on display once again in Q3 2020, with net new wireless subscriber additions and the highest rate of Fios Internet additions since 2014. But t...

In case you are interested VZ - Verizon's 4.4% Dividend Yield Remains One of the Best in Tech

[ElleDe]

Dead in here.

[Chrism0000]

When's is all this 5G really going to take off to make this stock go boom?

[Chrism0000]

The huge number is that a buy or a sell it's in black on the ihub app?

[Cameo Brien]

Back to 60s

[Cameo Brien]

Divy pay day ;)

[fung_derf]

Don't agree with the article. I'd say
PEP...yes
IBM...no
VZ....maybe

[whytestocks]

News: $VZ 3 Great Income Stocks to Buy Right Now

Dividend stocks are a great source of income. But in the wake of the current economic downturn brought on by the coronavirus pandemic, companies are cutting dividends. Income investors must seek businesses with the financial fortitude to not only survive but to thrive in this environment. While...

Read the whole news VZ - 3 Great Income Stocks to Buy Right Now

[DrewStegman]

The 3 Best 5G Stocks to Buy Right Now (Verizon 1st in list):

[Cameo Brien]

One of the best here

[conix]

VZ really did not sell off as much as other stocks. And the dividend is attractive. Those two things does attract buyers--and buyer support.

[t][/t]

[elgringo]

It's looking like it.

[fung_derf]

I think VZ has held up better than most stocks and the best place to be for 5G long term.

[elgringo]

What are you guys thinking now? VZ does get my atention.TIA

[Nebuchadnezzar]

$48-$49.50 5% yield $$$$$

[mick]

YES,

[Nebuchadnezzar]

Those $49s and $50's were scrumptious

[Nebuchadnezzar]

VZ yum $49s

[Nebuchadnezzar]

not sure how that will go, but remember, BA suspended its dividend after hours.

and cornonavirus just hit 300,000

[mick]

with da electronic monday ????? unexpected pps will be given trial and error testing

possible

If AAPL gets liquidated to $200 VZ will be $45-$47

[mick]

with da electronic monday ????? unexpected pps will be given trial and error testing

possible

If AAPL gets liquidated to $200 VZ will be $45-$47

[Nebuchadnezzar]

If AAPL gets liquidated to $200 VZ will be $45-$47

[mick]

VZ,HMMM, i don't think so. but anything possible in these trying times.

[Nebuchadnezzar]

I'll be buying at $45 with both hands

[leftovers]

45 for sure!

[Nebuchadnezzar]

VZ $40's next week??

[Nebuchadnezzar]

Do u not understand about "sell at any price" to raise cash not to mention OPTION witching garbage

Picked up 125 shares today $51.**

[fung_derf]

One would think, anything tied to online or internet usage stocks, would go up.

[02opida]

VZ does good

[mick]

Verizon Communicatio (VZ)
54.17 ? 2.97 (5.80%)
Volume: 45,744,246 @03/13/20 7:59:16 PM EDT
Bid Ask Day's Range
- - 51.4464 - 54.37
VZ Detailed Quote