Verizon Communications (VZ) vs. Its Competitors Critical Review

Verizon Communications (NYSE:VZ) is one of 203 public companies in the “Diversified Telecommunication Services” industry, but how does it weigh in compared to its rivals? We will compare Verizon Communications to similar companies based on the strength of its earnings, dividends, analyst recommendations, profitability, institutional ownership, risk and valuation.

Valuation and Earnings

This table compares Verizon Communications and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Verizon Communications	$138.19 billion	$17.17 billion	11.79
Verizon Communications Competitors	$12.33 billion	$893.66 million	-168.03

Verizon Communications has higher revenue and earnings than its rivals. Verizon Communications is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and price targets for Verizon Communications and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verizon Communications	0	16	13	0	2.45
Verizon Communications Competitors	1753	5343	7758	384	2.44

Verizon Communications currently has a consensus target price of $51.05, suggesting a potential upside of 10.49%. As a group, “Diversified Telecommunication Services” companies have a potential upside of 19.11%. Given Verizon Communications’ rivals higher possible upside, analysts plainly believe Verizon Communications has less favorable growth aspects than its rivals.

Profitability

This table compares Verizon Communications and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verizon Communications	11.78%	19.75%	5.07%
Verizon Communications Competitors	-11.85%	-217.35%	-3.33%

Volatility & Risk

Verizon Communications has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Verizon Communications’ rivals have a beta of -4.90, meaning that their average share price is 590% less volatile than the S&P 500.

Institutional and Insider Ownership

62.1% of Verizon Communications shares are held by institutional investors. Comparatively, 32.5% of shares of all “Diversified Telecommunication Services” companies are held by institutional investors. 0.0% of Verizon Communications shares are held by insiders. Comparatively, 18.3% of shares of all “Diversified Telecommunication Services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Verizon Communications pays an annual dividend of $2.83 per share and has a dividend yield of 6.1%. Verizon Communications pays out 72.2% of its earnings in the form of a dividend. As a group, “Diversified Telecommunication Services” companies pay a dividend yield of 13.8% and pay out 33.0% of their earnings in the form of a dividend. Verizon Communications has raised its dividend for 20 consecutive years. Verizon Communications lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Verizon Communications beats its rivals on 9 of the 15 factors compared.

Verizon Communications Company Profile

Verizon Communications Inc., through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business). The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access (FWA) broadband through its wireless networks, as well as related equipment and devices, such as smartphones, tablets, smart watches, and other wireless-enabled connected devices. The segment also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network. The Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and conferencing, corporate networking, security and managed network, local and long-distance voice, and network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.