Verizon
Been doing some digging on Verizon and was hoping to get some insight. I read over and over again just how solid a buy Verizon is. Looking at their financial statements, it seems to show that they love debt and have been able to pay a negative effective tax rate the last few years. what is it that people still see in Verizon? They are at like 140x's book and the industry and sector seem to outperform them in every aspect. Any thoughts?
Name any other wireless carrier that offers better service in the U.S. You can't, because Verizon is BY FAR the best.
Personally, I find that any company that operates in a quasi-duopoly is usually a good investment choice. Verizon and AT&T, Visa and Mastercard, UPS and Fedex, ect. Regardless of how well (or how poor) they do, the fact that they have share over a vast portion of whatever market makes them seem more resilient to market fluctuations. Those 6 companies I mentioned are up in a one year timeframe (17.3%, 17.9%, 37.4%, 31.5%, 7.6%, and 11.1% respectively). Hell Visa's P/E ratio is 71.6, yet a lot of people still think it's a good stock to buy. And, in the case that one company does poorly, it's usually because the other company is picking up market share. You just have to be careful about new entrants gaining lots of market share in a short period of time, or that their market is not transforming radically (i.e. landline phones to mobile devices).
Just my two cents on the matter.
Verizon has two major subcomponents, Verizon Wireless and Wireline (FiOS, etc.), and their differences are pretty stark. From their previous 10Q, it appears that their wireless business is making substantially more money then Wireline. But, their wireless business has been around a lot longer, and laying down a shitton of fiber is expensive. So, presumably, people love it because their wireless segment is effectively a mousetrap, and that their Wireline segment will catch up eventually. Plus, it's always nice to get a dividend.
Doesn't surprise me that many consider them to be a solid buy.
Verizon SG&A and Equity Numbers - 2013/2014 (Originally Posted: 02/05/2015)
I'm looking at Verizon's financial statements for 2013 and 2014 and I'm a little confused with the accounting. As you may be aware, they recently acquired Vodafone so I'm not surprised they're debt went up. However total equity dropped drastically, I'm not sure the reasoning behind this. In addition, they're SG&A decreased by nearly $10 billion in 2013 with no apparent reason. I think it may have something to do with the pension but I'm not positive. If anyone is familiar with Verizon or wants to provide some color, I'd greatly appreciate it.
(For school project)
Read the footnotes, everything is there.
They didn't acquire Vodafone, they acquired Vodafone's stake in Verizon Wireless.
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