What?! I can’t hear you! Hold on, is this better?
CAN YOU HEAR ME NOW?!?
All joking aside, I do plan to keep adding more Verizon (VZ) in 2022 in the bridge portfolio.
The name Verizon combines the Latin word veritas, meaning truth, with the word horizon, giving us VERIZON!
Verizon was created when Bell Atlantic and GTE merged in June 2000, which means it is a child of the AT&T “Ma Bell” breakup in 1984. If you don’t believe me, check out this crazy chart from our friends at slideplayer.com
AT&T reminds me of the blob, it can be broken up into small pieces, but it’ll eventually return to pre breakup form.
And now there’s just AT&T, Verizon and Qwest left from the Ma Bell’s breakup into the baby bells.
Verizon is the largest of the telecoms in the USA, with a market cap of $218.11 Billion, making them about the 54th most valuable company.
Three quarters of their revenue coms from wireless, while broadband and cable make up the remaining 25%.
Verizon’s network covers about 300 million people, 98% of the United States and has about 121 million customers – they are massive, to say the least.
Which is a great thing if you’re Verizon and don’t want to worry about some upstart telecom immediately competing with you.
And if they do, just “buy ’em up”, like they did with TracFone wireless in November 2021.
As of now there’s the big three – Verizon, AT&T & T-Mobile, and it looks like it’ll be that way for some time.
Verizon has a churn rate of about 1%, which tells me they are a sticky company.
That’s good. We like sticky.
In September 2021, Verizon and the NFL agreed to a 10 year deal worth more than $1 Billion, as part of their 5G rollout plan.
Verizon also committed more than $45 Billion in the midband spectrum auction in early 2021. They were the top bidder for this important airwave range to allow for faster wireless service.
Over the last 10 years earnings per share has grown 8.6%, while shares outstanding have also increased 46%.
Verizon is currently generating $5.18 of free cash flow per share, which is easily able to cover the annual dividend of $2.56.
Oh, and that dividend has been increasing for 15 straight years now, which is key.
We aren’t buying Verizon for growth of the company, but for the growing dividend and juicy yield of almost 5%.
To me this is a case of “know what you own and why you own it.” Which is why Verizon has a place in our portfolio – for the increasing dividends.
If you’re interested, you can read all about Verizon to your hearts content in their 2020 annual report HERE.
I’d love to know your thoughts, and until next time-
Keep investing in yourself.