Verizon 300% return or Debt Bubble | VZ stock analysis
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- Опубліковано 29 чер 2024
- Is Verizon a Dividend Aristocrat w/ 300% return or Debt Bubble? This video is an analysis of Verizon (VZ) from the fiscal year 2021 financial results as well as an estimate of the future value and possible investment return based on a discounted cash flow (DCF) and EV / EBITDA market multiple approach.
"Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." - Warren Buffett
So, here’s what we’ll be looking at in this video:
00:00 Verizon stock review
00:34 The 5 key attributes
01:13 Financial results
05:38 Cash flow
09:05 Learn to invest
09:33 Comparison chart
11:30 Forecast 2022-2031
17:16 Is Verizon (VZ) stock a buy? Final review
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-- Disclosure --
All opinions expressed by Cameron Stewart on this show are solely Mr. Stewart’s opinions. You should not treat any opinion expressed by Mr. Stewart as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Stewart’s statements and opinions are subject to change without notice. Past performance is not indicative of future results. Mr. Stewart does not guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this show. Before acting on information on this show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
#verizon #stockmarketcrash #techbubble #dotcombubble #marketcrash #stockmarketcrash #stockanalysis #stockmarket2022 #stocks #rationalivesting
The best value investing channel. I learn a lot from you. Thank you.
Happy to hear that!
As a recently retired 30-year VZ Treasury employee; well done! Impressive analysis. I still like it for a long-term play and am not scared by the debt as it is in the nature of telecoms to be both capital and debt intensive. The problems become with how well is that debt managed and how well are its proceeds invested? Thanks again for a great analysis!
I love your analysis on companies
Thanks Pal, nice work
Wow, thanks, this is by far the best analysis I've seen on youtube so far.
Thank you
Love the breakdown!
You say bad; I say NFW!
Great job, Cameron!
Most underrated channel. You are doing a fabulous job Cameron.
Are You Play football ?
Thank you for the comment, watching and the support
Great analysis!
Thanks so much.
I have learned so much from your videos. I just made an analysis on Apple and would really love to see your take in a video
Great video.
Glad you enjoyed it
Hey Cameron! I’m a new subscriber to the channel. Loving the content! Was just wondering if there is any way I can get a copy of the spreadsheet template you use, so I can do my own research and projections on companies I’m looking into?
Hi. I make the spreadsheet available in my investing course on my website. You get the full model and 3 hours on content plus a bonus multi location retail model for looking at retail opportunities (the pizza shop model)
This is a great showcase of companies that look good on paper but that very much have a catch to them. Probably the reason why It's important to read 10K forms on top of doing a valuation for a company.
yes. It's always important to take a look at a companies balance sheet. Especially net-debt/EBITDA
Would be interested to hear your take on att who is actually paying down debt
In this game it's not the one who has the most brains wins but the one who has the stomach to take unrealized losses and keep buying great companies at low cost wins. This is true for retail investors.
It's probably a mixture of both.
Dear Cameron: I appreciate the quote by Mr. Buffett. But, do you know when Verizon's falling knife will stop impaling? Is the VZ price of 35.87 a cause for hope or concern, as no gauze, gauge, nor guarantee is given for the hand-holding grab of the glaive?
wow, great video. Wonder what you would say about SMG?
oh interesting. 10x EV / EBITDA is the cheapest they've been in a long time. Although looks like inventory levels are vastly higher recently as sales slow down. This might be a nice long term hold. I'll check it out, thanks!
The whole sector is getting hammered lately, not just Verizon. The sector will recover along with Verizon.
Yeah, T, VZ, CMCSA, down horrendously
Who will turn off iPhone service?? Corporate customers? Strong ARR business model. It will recover and raise prices.
I think I want to buy enough shares of VZ to have their dividend pay my phone bill, but I bought a chunk 1.5 months ago and am now down -17% with them....Looks like it'd be better to just pay the cell phone bill on my own rather than fulfill the dividend goal lol
I mean, what's the point of fulfilling that dividend goal if I'm actually going to be down over -$1,000?
Unless long-term they can somehow recover and keep me in green AND pay the dividend....or they could sink another -50%
Now I understand why Warren Buffett sold his entire stake in Verizon. Many thanks mister Stewart 👍🏻
I’m confused why he bought it in the first place
@@TheMrDamp it's okay since rates are low. He had to sell when the FED raised rates.
I preffer AT&T which Has the soft data and KPI better, additonally the valuation in my opiniom is better especially the PE and EV/Ebtida with less debt
Are you satisfied with management's blunders regarding their prior merger decisions with time Warner? Seems concerning to me while Verizon has successfully navigated the chord cutting phenomenon via value added relationships with access to streaming service s
@@nonexistent5030 Warner merger was done by different people. Verizon had its own blunders by buying Yahoo and now it has a major problem by loosing subscribers. I would generally say don't mix personal decisions with the Company strategy which is totally different right now.
First I want to say I love your videos, keep up the great work. Secondly, the financial info is spot on, however, Verizon has substantially invested in its 5G network over the last couple of years. They now have the largest 5G network and even current 129 billion of revenue is only going to increase because of said investment. Once prices adjust for inflation and rise, they will rake in even more. They were also just awarded a 1.8 billion dollar government contract to update all the US embassy’s technology worldwide! Verizon isn’t going anywhere anytime soon.
Thanks for that!
Very good, I am a Verizon retiree, I did own the stock thru my 401k. I think you looked at this stock before and gave it a mem. Well anyway could you look at International Paper and Weyerhaeuser. Thank You
Dennis - see my other comment to you. Don’t ever call a number posted here
I have 230 shares at 51.78 :), what I should do, as your future prediction on VZ is not so bright. Will not 5G help the company to regain its strength?
Cameron. What about now? Market is up but Verizon is down even further. Hard to turn down an undervalued with 7% dividend
Ulta Beauty (ULTA) and Malibu Boats (MBUU).
Do you like VZ today down to $34? I was curious why you seem to like T ; but not VZ? They seem very similar situations?
command-F "vacation" in their 10-K tells me all I need to know.
Still better then at&t
not at $39 it could go down 10% more then back the truck up
15:30, not the whole cf gets 3% intrest rate anually...
Cargojet
Is the spreadsheet used in the analysis shared and available?
Hi. The worksheet is shared in my Investment Course
Loved the analysis. Find really dangerous the way they run their business no intention of leveraging down the balance sheet and many investments that don't show any improvement in the CFO line. Seems like a zombie to me.
T Rowe Price and Global Payments
Global Payments is in the Cash Flow Club
You shouldn’t have kept the shares outstanding constant. They surely will issue more shares over time which will bring the fair value way down. Maybe like it is now at around 35$ which makes Verizon not cheap at all.
good comment, thanks.
Thanks for the content! One quick Q. You divide in 2031 by 4150 shares. Should you not divide by the shares outstanding in 2031 which might be more likely be in the >6000 region considering they have been diluting their share count by about 4% each year?
Interestingly, debt load is a function of bandwidth. That such cost when purchased at auction is also a right to respectively own that component of the 4G or 5G airway. That cost rise with inflation is appropriate so to is the advancement of technology that enables a broader form of subscription services.
A case in point is the announcement of a $1.5bln contract to upgrade embassies. Presume a total of 150 embassies is $10mm per. Demonstrating further the cost benefit in relation to the magnitude of enabling such technology. i.e. $2.5bln in new government subscription services.
As VZ dividend payout has increased. What is the value of a DRIP over the time differences as outlined in the analysis when debt load and share dilution is so prominent in the valuation of basic cost analysis?
In following these analysis as presented there seems always to be left in the background an operand that is as fundamental to the analist as to what is presented which is why I agree with the support as stated in replies that these presentation are well crafted.
Thanks for the question. I’m distributing all free cash flow so there’s no money left to buy back chairs, I’m also assuming no additional dilution, that all cash flow can meet obligations
@@CstewartCFA Which therefore reduces Gamma over time as debt saturation perhaps correlates more closely with share dilution. So that in order to buy bandwidth. Addditional shares are offered which historically may well have been how such dilution occured when offering such financing while beginning to invest in the buildout out of the infrastructure required to support the new services. Which was meant to be demonstrated as a cost per installation given the example above. Or as much a system with far reaching capabilities as more devices are incorporated...
Now to explain the 300% swing graph, please.
The cash flow includes a $20B capex annually to build infrastructure, that's enough to buy bandwidth. Also, most of the dilution was earlier in the decade.
@@CstewartCFA thanks for coming back.
I'm an owner of this stock alongside T, but your concerns about the debt are making me second-guess both of them. Maybe it's time for me to move that money into a couple ETFs and let the booked losses offset my other capital gains.
I am not sure about that , if you can hold it for long-term I do not see any reason why it won't get back to original 45 -50 level
I'm down -17% on VZ and was quickly down -9% on T before selling T
Yes high debt can get very ugly during a recession
@@TheCashFlowChannel they have relatively high interest coverage so they'll be able to weather the storm, but you're right that eventually those old low interest bonds are replaced with higher interest bonds and that can cause problems if it goes on for long enough.
@@cmccarrick10 Sometimes a stock is still worth to take the risk. But it's important to know that there's a risk in the first place
Capex going down isn’t perse a bad thing
Dont't you think, despite the debt it is a good stock if you know their divident rate is 7%?
I bought 150 shares at 37.50 and its currently 39.40. I like the idea of a solid 7% dividend and I expect we are close to the bottom at 37.50.
Please give more information about the book: 1 to 100. Please give author's name and complete title. -Thanks
100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities
Book by Thomas William Phelps
What is cash-flow club?
We have a team of analysts that publish 1-Pagers on a variety of companies and estimate the IRR and future cash flow. You can get a sample on my website www.cashflowinvestingpro.com
My God, where did you put dividends in your model?
I look at all free cash flow, dividend is a portion of that money
Wait a sec. A few months ago, you gave T a "Good" even though their current debt/FY22E ebitda is higher than VZ but VZ is a debt bubble even though they have similar cash flow? What's up with that
they both have debt issues.
The debt is high because of the IEN cisco equipment that they have been betting billions for 5 g network
Can I just pay you for your top share picks ?
cash flow club, please.
i passed the cpa exam in 1992, i feel bad because with out the top 7 stocks by market cap. stocks are dead right now
#EndTheFed :)
how about Fiscal Responsibility? There's a phrase I haven't heard in about 20 years.
@@CstewartCFA That would be good too. :)
VZ TOO MOON YAY🚀
please reply again I could not reach you, reason unknown (number?)
Dennis - I would never ask you to call me. There are bots on the internet that clone my account and ask you to call. I delete them as fast as they pop up. Please don’t ever call one of those numbers.
My email in my profile or in the description of videos is the way to contact me. Www.cashflowinvestingpro.com
Ps - I get your email and wanted to respond in the channel. Please don’t call any numbers. I would never ask that of you.
95%+ of VZ's debt is fixed interest.
Good, then the rate impact will be slower as their loans mature and are rolled at higher rates
@@CstewartCFA AT&T, VZ & T-Mobile all put a list of their total debt outstanding (down to individual issues with $/rate) on their investor relations websites.
@@OldAssSax Yep. And a lot of the debt is very long term. I think some of T's debt goes out many decades.
@@andrewilliamson4926 Yeah VZ's debt is lower interest overall than T, but T is a good bit cheaper overall on price to sales/price to earnings/price to free cash flow. Oh and T has ~$22 billion less debt.
If you think interest rates are going to stay high,then you must also believe that the federal government will be completely bankrupt.
they have real problems.
Verizon has terrible service from a business standpoint. I work for a very large company and we are dumping them asap. Terrible service and interruptions with updates from support taking days.. The worst I've ever seen. Stay away from this company!
Who are you switching to?
I can tell you an AT&T horror story. That will make your brain hurt.
The Verizon wifi is excellent in my house. Way better than Comcast
There’s way too many bulls in the comments for me to feel comfortable owning this
I have 130 shares. Have had that much for 3 years. I will not be adding anymore during this period of lows. I'm concerned about the rising cost of debt and the slow growth due to saturation.
@@Widemouth1832 My goal is 143 shares. Bought 23 shares a month and a half ago and am down -17% so quickly...now I don't know whether I should keep adding.
@@Discovery_and_Change It's a tough call. There are no guarantees in investing. I look at it like a utility stock. It's not going to have great growth, but it is a necessity that will be able to increase prices to offset inflation. I won't make it the cornerstone of my investments. But, it will be a decent part of it.
@@Widemouth1832 thanks!
Congrats on your shares. Must be over $20 in dividends per quarter