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Buy Verizon Communications shares after recent dip?

The shares of Verizon Communications Inc. (NYSE: VZ) have weakened from $51.77 to $38.63 since early July 2022. The current price stands at $39.47.

Verizon increased its quarterly dividend by 2% this month. Shares of this company can provide strong returns for long-term investors.

Verizon raises quarterly dividend by 2%

Verizon is a major American telecommunications company, currently the second largest in the country, just behind AT&T Inc. (NYSE:T).

While the company’s business continues to perform well, Verizon’s share price collapsed this week to a new 6-year low of $38.63.

The current share price is $39.47, which is attractively valued based on earnings, Q2 performance, outlook and dividend.

Verizon delivered excellent wireless volumes in the second quarter, with 430,000 net acquisitions, including 227,000 postpaid phone acquisitions, surpassing 200,000 net wireless acquisitions for the third consecutive quarter.

The company’s management updated its guidance for fiscal year 2022 and reported that it expects wireless service revenue to grow between 8.5% and 9.5%, while earnings per share will grow between $5.10 and $5. .25 (previous forecast was $5.40-$5.55).

Last fiscal year, Verizon increased its total revenue by about 4%, from $128.29 billion in fiscal year 2020 to $133.61 billion in fiscal year 2021. The stocks boston dynamics ipo is found online. The earnings situation was even better, with earnings per share up from $4 .30 in fiscal year 2020 to $5.32 in fiscal year 2021.

As the company continues to grow reasonably and consistently and is expected to continue to do so going forward, the current price seems very attractive.

Another piece of positive news is that the Board of Directors has declared a dividend of $0.652/quarter share this month, representing a 2% increase from a previous dividend of $0.6400. The dividend will be made payable to shareholders on November 1 with a record as of October 6, 2022.

The dividend yield is above 6% at the current share price, and for investors looking for a high but reliable dividend, with the prospect of single-digit growth in the future, this stock could be a good choice.

Verizon’s business model is relatively resilient to recessions as demand for phone services is not overly cyclical and the company continues to have strong cash flow, which remains an important figure supporting the current dividend payout.

Verizon shares are currently trading at a “multi-year low,” less than eight times forward P/E, and less than four times TTM EBITDA, also proving that Verizon is currently quite undervalued.

Technical analysis

Verizon’s share price is down more than 25% after reaching its 2022 high of $55.51 on April 21, and the risk of further declines remains.

The price is still moving below the 10-day moving average. This indicates that the bottom has still not been reached. Despite this, shares of this company can provide strong returns for long-term investors.

The current support level is at $38, while $46 represents the first level of resistance. If the price falls below $38, it would be a “sell” signal, and the path to $35 or even lower is clear. On the other hand, if the price jumps above USD 46, the next target could be USD 50.

Conclusion

While the company’s business continues to perform well, Verizon’s share price collapsed this week to a new 6-year low of $38.63. The dividend yield is above 6% at the current share price, and this stock could be a good choice for investors looking for a high but reliable dividend.