Verizon (VZ) Q4 Earnings - Stock Set To Soar Now That Investment Cycle Over? | Summary and Q&A

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January 24, 2023
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The Investor Channel
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Verizon (VZ) Q4 Earnings - Stock Set To Soar Now That Investment Cycle Over?

TL;DR

Despite a significant decline in stock performance, Verizon's dividend is safe due to its strong capitalization and cash flow. However, the stock may not be an attractive buy for investors seeking growth opportunities.

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Key Insights

  • 🍝 Verizon's stock has experienced a significant decline in the past year, but its dividend remains safe.
  • 😘 The company's revenues have grown at a low single-digit rate, and expenses have risen, leading to a decline in operating income.
  • 👻 Verizon's cash flow is strong, allowing them to support their dividend and pay off debt.
  • ❓ The stock may not be attractive for growth investors, but it offers stability and income for dividend investors.
  • 😀 The 5G rollout and decreased capital expenditures in the coming years could improve Verizon's financial performance.
  • ☠️ Churn rates and retail post-paid accounts have seen some declines, indicating potential challenges in customer retention.
  • 🍳 The stock is currently in a steep downtrend, and it may take time for it to break out and attract investors.

Transcript

Verizon stock just finished off one of its worst performing years in decades is the dividend safe over at this company and after the massive 24 decline over the last year for Verizon does this make this stock a good buy the dip opportunity particularly for dividend investors talk about that and more on today's show what is going on investors hopefu... Read More

Questions & Answers

Q: Is Verizon's dividend safe?

Yes, Verizon's dividend is safe due to its strong capitalization and cash flow. The company has enough cash to cover the dividend payments, and it remains well capitalized.

Q: Should investors buy the dip in Verizon stock?

It depends on the investment goals. For dividend investors seeking stable income, Verizon stock could be a good buy. However, for investors looking for growth opportunities, other stocks might be more attractive.

Q: Why has Verizon's stock performed poorly?

Verizon's stock has declined due to several factors, including low single-digit revenue growth, rising operating expenses, and an inflationary environment where they cannot pass price increases onto customers.

Q: How is Verizon managing its debt?

Verizon has been paying back its debt, which is factored into its dividend and EPS calculations. The company's long-term debt has decreased, but they still have significant debt maturing within the next year.

Summary & Key Takeaways

  • Verizon stock has experienced a sharp decline of 24% in the past year, making investors question the safety of its dividend.

  • Q4 revenues for Verizon came in at $35.3 billion, beating expectations, but the company is facing low single-digit revenue growth and an expected contraction in earnings.

  • Operating expenses have risen for Verizon, offsetting the modest revenue growth and leading to a decline in operating income.

  • Despite this, Verizon's dividend of $2.61 per share is well capitalized and supported by strong cash flow.

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