Verizon Is A Good Dividend Hideout Despite Mixed Q1 Numbers – Hold

Summary:

  • Last week, Verizon presented a mixed set of numbers for Q1 2024, with revenues missing consensus estimates.
  • The company’s dividend yield of 6.7% is still attractive in the current interest rate regime and uncertain macroeconomic environment; however, surging treasury yields are making it less appealing.
  • Verizon’s stock is undervalued at current levels, and its 5-year price target of $67.72 implies an expected CAGR return of ~11% over the next five years.
  • I continue to rate VZ stock a “Hold” in the high $30s.

Verizon sign on the office building in San Diego, CA, USA.

JHVEPhoto

Introduction

In early January 2024, I downgraded Verizon Communications Inc. (NYSE:VZ) to a “Hold” rating, citing significant deterioration in long-term risk/reward on the back of a quick-fire year-end rally in its stock:

In light of a rapid +25% jump in its


Analyst’s Disclosure: I/we have a beneficial long position in the shares of VZ either through stock ownership, options, or other derivatives. 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.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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