Verizon Gives Key Updates and Growth Metrics at Conference
Verizon’s size in the US telecom space
In this part, we will look at the value proposition of Verizon (VZ) in the US telecom space as of December 8, 2015. Let’s start with the scale of the company. Verizon is the second-largest US telecom company by market capitalization as of December 8, 2015. It follows AT&T (T) in this metric. Verizon had the largest US wireless operations and the second-largest US wireline operations in 3Q15. AT&T was the second-largest on the wireless front and the largest in the wireline in the US during the quarter.
Dividend yield of Verizon and select peers in the US
Now, let’s look at Verizon’s dividend yield compared to select US integrated players as well as wireline telecom players. The telecom company’s average five-year dividend yield is ~4.7%, which is slightly lower than AT&T’s dividend yield of ~5.4%.
However, the average five-year dividend yield of these two integrated players is lower than Frontier Communications (FTR) and CenturyLink (CTL). These dividend yield figures for Frontier and CenturyLink are ~9.6% and ~7%, respectively.
In terms of forward annual dividend yield, the figures for Verizon and AT&T were ~4.9% and ~5.5% as of December 8, 2015. Meanwhile, forward annual dividend yield of Frontier Communications and CenturyLink were ~8.2% and ~8.1%, respectively, as of the same date.
Instead of getting direct exposure to Verizon’s stock, you can get diversified exposure to the telecom company by investing in the iShares Core High Dividend ETF (HDV). The ETF held ~6.1% in the telecom company at the end of November 2015. Please note that telecom players made up ~14.2% of this ETF on the same date.
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