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Verizon's MERIT Ready to Protect Network Assets & Facilities

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Verizon Communications Inc.’s (VZ - Free Report) specialized group of engineers known as MERIT —Major Emergency Response Incident Team — recently finished their annual training to ensure the protection of the company’s network assets and facilities in the event of natural disasters or hazardous materials incidents. Formed in 1992, Verizon’s MERIT team consists of more than 30 technically skilled communications employees. These members are certified and capable of entering into an area hit by hazardous materials spill and responsible for completing network repairs.

In fact, the MERIT team is known to have a wide range of expertise in areas such as wireless and wireline telecommunications network equipment like fiber optic cables, routers, transmission equipment, customer premise equipment, wireless mobile assets, radio networks and critical infrastructure like Heating, Ventilation and Air Conditioning (HVAC) systems. Trained in emergency response management, this team of specialized engineers are also capable of operating at the highest operational protection level. The use of multiple tools enables them to detect over 30 chemicals, biological as well as radiological containments.

Notably, the team’s training has been completed under the guidelines of Occupational Safety and Health Administration (“OSHA”) and National Fire Protection Association (“NFPA”). Verizon’s MERIT team is equipped with an onsite, climate-controlled mobile command center with a conference room, workspaces, external cameras, communications equipment, an on-board generator as well as a weather station.

Our Take

Verizon expects its Wireless and Wireline businesses to perform impressively in 2018. Solid margin expansion owing to expected savings from tax reform and continued strong FiOS fiber-optic network and strategic services in the Wireline business is also anticipated in the same period. Further, the company is looking forward to capitalize on the countless innovative technology solutions being developed in the Internet of Things and telematics ecosystem across multiple industries. Verizon’s focus on online content delivery, mobile video and online advertising is likely to drive growth as well.

In the past three months, shares of Verizon have lost 0.5% compared with the industry’s decline of 4.3%.

Moreover, the Zacks Rank #3 (Hold) company is systematically diversifying itself as a major player in the digital content and online advertising space.  Also, the company has been forging ahead to expand its fiber optics networks to support 4G LTE and upcoming 5G wireless standards as well as wireline connections. Verizon too has an attractive fundamental outlook based on increasingly favorable growth prospects for its Wireless business and the possibility of improved performance from its Wireline operations.

However, Verizon continues to struggle in the competitive and almost-saturated U.S. wireless market. The industry is likely to witness more competition in 2018, with the entry of cable MSOs (multi service operators). Furthermore, in an effort to expand its customer base, the company is spending heavily on promotion and offering lucrative discounts, which might weigh on margins.

Stocks to Consider

Some better-ranked stocks in the same space include AMETEK, Inc. (AME - Free Report) , Garmin Ltd. (GRMN - Free Report) and Intuit Inc. (INTU - Free Report) . All these three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMETEK surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 6.03%.

Garmin outpaced estimates in the preceding four quarters, with an average earnings surprise of 12.26%.

Intuit exceeded estimates in the preceding four quarters, with an average earnings surprise of 37.79%.

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