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Verizon (VZ - Free Report) is one of hundreds of companies that is set to report its first quarter fiscal 2020 financial result this week amid the ongoing economic uncertainty and turmoil brought on by the coronavirus pandemic. So let’s dive into what’s going with the wireless giant to help investors see if they should consider buying VZ with its Q1 earnings due out Friday morning.
The Quick VZ Pitch
All three major U.S. indexes fell on Tuesday as oil industry turmoil grows. At the same time, governments have started to consider the best ways to begin to reopen parts of their economies, while still combating the coronavirus.
Amid all of the economic chaos, which includes over 20 million people in the U.S. filing for unemployment in the last month, Verizon stock has outperformed the market. The company is the largest U.S. wireless carrier by subscribers.
This makes it a somewhat recession-resilient because people are likely to look to cut back on spending elsewhere before they drop or reduce their wireless and broadband services during economic downturns, especially when they are stuck inside.
On top of that, Verizon hasn’t taken on a ton of debt to fuel expansion like rival AT&T (T - Free Report) . And even before the coronavirus outbreak, VZ was focusing on cost-cutting measures as it ramps up its 5G push that requires a large amount of capital spending. Plus, Verizon ended fiscal 2019 on a high note after it recorded its most Q4 wireless adds in six years.
Q1 Outlook & Beyond
Moving on, our current Zacks consensus estimates call for Verizon’s first quarter revenue to pop 0.90% to reach $32.41 billion. This would fall short of Q4’s sales growth but match the third period’s revenue expansion.
Meanwhile, its adjusted quarterly earnings are projected to climb 1.7% from the year-ago period to hit $1.22 a share, which would top last quarter’s bottom-line expansion.
Peeking further ahead, which is harder these days given the unprecedented halt to large swaths of the economy, Verizon’s full-year fiscal 2020 sales are expected to climb 0.20%. VZ’s adjusted EPS figure is projected to climb roughly 1% to come in at $4.86 a share.
Bottom Line
The nearby graphic helps investors see that Verizon’s earnings revision picture has turned negative recently, along with countless other corporate giants. VZ is currently a Zacks Rank #3 (Hold) that does boast “B” grades for Value, Growth, and Momentum in our Style Scores system.
Verizon is also part of any industry that rests in the top 15% of our more than 250 Zacks industries at the moment. Better still, VZ’s dividend yield sits at a strong 4.33% to easily top the S&P 500’s 2.12% average and its payout ratio is a sustainable 51%.
VZ stock closed regular trading Tuesday roughly 8% below its 52-week highs at $56.82 a share. This could give Verizon shares room to climb if the firm is able to impress Wall Street. That said, buying stocks around earnings seems risky at a time of such unknown, and more companies are likely to pull their full-year guidance like IBM (IBM - Free Report) did on Monday.
Some investors might want to think about buying VZ as a longer-term play. Plus, it is worth noting that Verizon last week announced that it is set to buy video conferencing company Blue Jeans Network, as industry rival Zoom Video (ZM - Free Report) stock soars.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Verizon Q1 Earnings Preview: Buy VZ Stock for Stability Amid Coronavirus?
Verizon (VZ - Free Report) is one of hundreds of companies that is set to report its first quarter fiscal 2020 financial result this week amid the ongoing economic uncertainty and turmoil brought on by the coronavirus pandemic. So let’s dive into what’s going with the wireless giant to help investors see if they should consider buying VZ with its Q1 earnings due out Friday morning.
The Quick VZ Pitch
All three major U.S. indexes fell on Tuesday as oil industry turmoil grows. At the same time, governments have started to consider the best ways to begin to reopen parts of their economies, while still combating the coronavirus.
Amid all of the economic chaos, which includes over 20 million people in the U.S. filing for unemployment in the last month, Verizon stock has outperformed the market. The company is the largest U.S. wireless carrier by subscribers.
This makes it a somewhat recession-resilient because people are likely to look to cut back on spending elsewhere before they drop or reduce their wireless and broadband services during economic downturns, especially when they are stuck inside.
On top of that, Verizon hasn’t taken on a ton of debt to fuel expansion like rival AT&T (T - Free Report) . And even before the coronavirus outbreak, VZ was focusing on cost-cutting measures as it ramps up its 5G push that requires a large amount of capital spending. Plus, Verizon ended fiscal 2019 on a high note after it recorded its most Q4 wireless adds in six years.
Q1 Outlook & Beyond
Moving on, our current Zacks consensus estimates call for Verizon’s first quarter revenue to pop 0.90% to reach $32.41 billion. This would fall short of Q4’s sales growth but match the third period’s revenue expansion.
Meanwhile, its adjusted quarterly earnings are projected to climb 1.7% from the year-ago period to hit $1.22 a share, which would top last quarter’s bottom-line expansion.
Peeking further ahead, which is harder these days given the unprecedented halt to large swaths of the economy, Verizon’s full-year fiscal 2020 sales are expected to climb 0.20%. VZ’s adjusted EPS figure is projected to climb roughly 1% to come in at $4.86 a share.
Bottom Line
The nearby graphic helps investors see that Verizon’s earnings revision picture has turned negative recently, along with countless other corporate giants. VZ is currently a Zacks Rank #3 (Hold) that does boast “B” grades for Value, Growth, and Momentum in our Style Scores system.
Verizon is also part of any industry that rests in the top 15% of our more than 250 Zacks industries at the moment. Better still, VZ’s dividend yield sits at a strong 4.33% to easily top the S&P 500’s 2.12% average and its payout ratio is a sustainable 51%.
VZ stock closed regular trading Tuesday roughly 8% below its 52-week highs at $56.82 a share. This could give Verizon shares room to climb if the firm is able to impress Wall Street. That said, buying stocks around earnings seems risky at a time of such unknown, and more companies are likely to pull their full-year guidance like IBM (IBM - Free Report) did on Monday.
Some investors might want to think about buying VZ as a longer-term play. Plus, it is worth noting that Verizon last week announced that it is set to buy video conferencing company Blue Jeans Network, as industry rival Zoom Video (ZM - Free Report) stock soars.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>