Verizon Gives Key Updates and Growth Metrics at Conference
Price performance of Verizon and peers
In the last part of the series, we looked at Verizon’s (VZ) value proposition in the US telecom space. Now we will look at some of Verizon’s market-centric metrics and compare them with those of its peers. Let’s start with the price performance of the company and select peers. As of December 8, 2015, Verizon’s 52-week price decline was ~1%. Meanwhile, for AT&T (T), the increase in the comparable metric was ~4.2% as of the same date.
In the wireline space, Frontier Communications (FTR) and CenturyLink (CTL) witnessed negative returns of ~23.3% and ~30.9%, respectively, in this metric. Meanwhile, T-Mobile’s (TMUS) 52-week price increase was a significant ~45.6% on the same date. For Sprint (S), the decline in the comparable metric was ~13.5% as of the same date.
Earnings multiples
Now let’s look at earnings multiples of select telecom players. Verizon was trading at forward PE (price-to-earnings) and forward five-year PEG (PE to growth) multiples of ~11.4x and ~1.5x, respectively, on December 8, 2015. Meanwhile, the comparable PE and PEG multiples for AT&T were ~12x and ~2.1x, respectively.
In the US mobile space, T-Mobile had forward PE and PEG multiples of ~19.2x and ~0.7x, respectively. Moreover, in the US wireline space, CenturyLink (CTL) had a comparable PE of ~11.2x on the same date.
Analyst recommendations
Now we will look at Wall Street expectations for Verizon. In the current month, there were nine “strong buy,” eight “buy,” 15 “hold,” and two “underperform” recommendations for Verizon. For diversified exposure to Verizon, you can consider investing in the iShares U.S. Telecommunications ETF (IYZ). The telecom company made up ~10.3% of the ETF at the end of November 2015.
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