The re indicates that S of Verizon Communications (VZ) have struggled to keep up with rival AT&T the past couple of years, but the stock recently got a lift after posting solid second quarter results and issuing upbeat guidance (something worth watching).
This analysis suggests that company's stock price is now up 7% on the year, while it also carries an over-6% yield. Let's see if now is the time to jump into the stock.
Furthermore, Image source: Getty Images, given the current landscape.
Additionally, However, Broadband leads the way Verizon's wireless is still its most watched, but it has been its broadband that has been leading the way.
The company added 293,000 net broadband rs in the quarter to 12 (remarkable data). Moreover, 9 million, an over 12% increase compared to a year ago (an important development).
It added 278,000 fixed wireless rs, and 15,000 net Fios rs.
At the same time, Its consumer wireless, meanwhile, continues to lose rs after enacting a price hike earlier this year (which is quite significant), given the current landscape.
Nevertheless, It shed 51,000 postpaid consumer wireless rs, who are rs that are billed monthly.
Furthermore, This's opposed to prepaid rs, who pay for their services up front, in today's market environment. Furthermore, Prepaid r additions increased by 50,000.
Overall consumer wireless service revenue rose 2, considering recent developments. At the same time, 4 billion, as postpaid average revenue per account climbed by a similar percentage to $147.
Service revenue rose 1, in today's market environment.
However, The company added 65,000 wireless retail postpaid net additions, which include connections to phones, tablets, and smartwatches, considering recent developments.
Apximately 42,000 of those additions were for smartphone connections. However, total revenue edged down 0. Nevertheless, 3 billion, as it continues to churn off wireline rs (this bears monitoring).
Additionally, Overall, Verizon's Q2 revenue rose 5. Furthermore, 5 billion, topping the analyst consensus of $33. Meanwhile, 74 billion, as compiled by LSEG, in light of current trends.
Wireless service revenue increased by 2 (noteworthy indeed). On the other hand, 9 billion, while wireless equipment revenue surged 25. Adjusted earnings per (EPS) climbed 6% to $1.
Furthermore, 22 from $1. Moreover, 15 a year ago. Additionally, Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 4.
Looking ahead, Verizon maintained its full-year 2025 forecast for wireless revenue to grow between 2% and 2. Moreover, However, it increased the low end of its fitability forecasts.
Furthermore, It now expects adjusted EPS to grow by 1% to 3%, and for adjusted EBITDA to rise between 2.
The company also boosted its operating cash flow outlook to be between $37 billion and $39 billion. Nevertheless, After capital expenditures (capex), that would result in free cash flow of between $19.
Furthermore, Furthermore, 5 billion and $20. On the other hand, Metric Prior Guidance Current Guidance Wireless service revenue growth 2% to 2 (noteworthy indeed). 8% 2% to 2.
8% Adjusted EPS growth 0% to 3% 1% to 3% Adjusted EBITDA growth 2% to 3. 5% Operating cash flow $35 billion to $37 billion $37 billion to $39 billion Free cash flow $17. Furthermore, 5 billion and $18.
However, 5 billion $19. 5 billion and $20. However, 5 billion Data source: Verizon. Moreover, Table by author, considering recent developments.
Checking in on the dividend Verizon's biggest draw continues to be its dividend. The stock yields 6. 4%, and more importantly, that payout is well covered by free cash flow, in light of current trends.
Through the first half of the year, Verizon generated $8, in this volatile climate. 8 billion in free cash flow and paid out $5, in light of current trends. 7 billion in dividends, good for a 1.
5x coverage ratio. Additionally, That gives the company plenty of breathing room to invest in the and keep raising the dividend.
Meanwhile, the company creased its operating cash flow and free cash flow guidance.
This's being helped by new tax legislation, which allows it to immediately 100% depreciate certain assets that are placed into service this year. Verizon's balance sheet is also solid.
The data indicates that s unsecured leverage is 2. In contrast, 3x, which is very manageable, given how much free cash flow it throws off, considering recent developments.
Furthermore, Even if the economy softens, Verizon has a wide margin of safety. The dividend isn't just safe -- it's set to continue to head higher. Is it time to buy the stock.
Nevertheless, Verizon's earlier price hike continues to impact wireless churn, but the company is working to try and imve retention through such methods as using artificial intelligence (AI) to help imve the customer experience, in light of current trends.
However, Meanwhile, it continues to do a good job of adding broadband rs (remarkable data).
Broadband should become even more important after the company closes its acquisition of telecom company Frontier Communications sometime next year, amid market uncertainty.
Additionally, Verizon is actually reacquiring a lot of fiber assets that it sold to Frontier back in 2016, when it sold the assets to reduce debt after some large-spectrum purchases and to focus more on its wireless.
Moreover, Frontier has since expanded its fiber network, and the acquisition will now greatly expand Verizon's fiber network in states outside the Northeast and Mid-Atlantic, including Florida, Texas, and California.
On the other hand, The deal will allow the company to more widely bundle mobile and internet services together.
That could help give it an edge when competing against AT&T and cable companies, and position it well for next year.
From a valuation standpoint, Verizon trades at a forward price-to-earnings (P/E) ratio of 9x based on 2025 earnings estimates, well below the 13x multiple of AT&T.
While Verizon has had some struggles with postpaid wireless additions, I think the Frontier deal could put the company is a strong position to bundle services to a much wider group of customers, giving it strong potential upside.
As such, given the volume gap and this potential catalyst, I think the stock is a solid option for income-oriented investors to buy right now.