Summary
This stock has traditionally attracted dividend investors.
Is it a buy now though?
We go through its financials to see how they have been trending.
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Many conservative investors like buying companies with lots of cash flow and earnings. They see it as protection against the downside with a viewpoint that capital will be there in case the market was to turn. Growth investors on the contrary hate to see excess cash in the financials, as they invariably see it as a resource that could be used to further increase returns elsewhere.
Verizon (VZ) came across my desk as a potential value play in the telecoms sector. As chartists, we believe that everything such as its 5G technology is already reflected in the share price at present. Remember, we invest in what is in front of us; now what could potentially come down the track? Verizon Communications is trading with seemingly attractive cash and earnings multiples. Over the past four quarters, the firm has generated over $35 billion of operating cash flow. With a market cap of almost $250 billion, this means that Verizon's present cash flow multiple comes in at just over 7. On the earnings front, Verizon's earnings per share over the past four quarters come in at $7.82. With a share price of $60.30 at present, this gives us a price to earnings ratio of 7.7. These are two key valuation metrics trading at what seem to be very attractive numbers. For any potential value play, we look for both of these metrics to be under 10, which in Verizon's case, they are. Let's go deeper though.
