How To Register For Verizon

I'one thousand hither for what I see as a relatively rubber four.3% yield in an unsafe environs for dividend yields. But there is an investment opportunity.

By STEPHEN GUILFOYLE

Apr 24, 2020 | eleven:01 AM EDT

Stocks quotes in this article: VZ, T, MRVL

Long-time Sarge long Verizon (VZ) went to the tape with the firm's commencement quarter results on Friday morning. This is one of those names that I largely forget well-nigh, just kind of sits there on my book, doesn't concenter a lot of attention, unless it is that time of the calendar month when I pay my bills. I am a Verizon client. Oh, many of you accept heard me mention the name on television, but never in isolation. Verizon has always either been function of my "dividend book", or role of my "5G play". The stock has never been one of my top performers, only it has never hurt me either. So, let's take a expect at what had to be a tough quarter.

For the quarter, Verizon reported adapted EPS of $1.26, which did shell expectations, and was good for ix% earnings growth. Ix percent is well above anything seen for that space for this firm since 2018. Sales were a different story. There are some dents in the armor. Revenue landed at $31.6 billion, which was both a miss of consensus view, and down ane.half-dozen% year over year.

The firm did acknowledge a negative impact created by the current economic shutdown forced on all of u.s.a. by the Covid-nineteen pandemic. Verizon gauges that the pandemic probably had negative iv cent impact on EPS, primarily due to the number of customers not paying their bills. The firm has stated that what is known equally "bad debt" expenses increased by $228 million given the number of customers that are expected to seek payment relief. Verizon expects these costs to ascent further in the second quarter.

Segments

The Consumer segment saw revenues subtract by ii% to $21.eight billion. This factors in 307K net phone losses, and 167K postpaid smartphone losses. On the plus side, at that place were 59K Fios Internet net additions as the need to piece of work and larn remotely increased dramatically. A trouble for the house on the consumer side, has been the demand to close nearly 70% of its retail locations, while reducing hours among those able to remain open up. This obviously resulted in reduced device volumes for the period. It should be noted that inside that $21.8 billion was the $thirteen.five billion provided through the wireless service, and that component happens to have grown slightly over the same period last year.

On the Business side, revenue declined 1% to $7.7 billion, despite 475K retail postpaid net additions that include 239K net phone adds. This segment saw demand rise for VPN services as well every bit for increased loftier-speed circuit capacity. Not simply that, but the firm has been responding to increased need for support from those who are on the forepart lines of this crisis.

Verizon Media experienced increased customer date across its portfolio of platforms such as Yahoo, AOL, Huffington Post, TechCrunch, and Engadget. Unfortunately, due to the impacts on various businesses past this coronavirus, there has been a 4% decrease in revenue provided by this grouping to $1.vii billion, primarily due to a decrease in ad.

Outlook

Needless to say, Verizon has pulled guidance for full yr revenue generations due to really the unknowable magnitude or length of what is the current status of this economy. The firm did reduce guidance for 2020 adjusted earnings growth from +2% to +4%, down to -2% to +ii%. This includes the expectation that significant headwinds persist through the second quarter. The firm also expects majuscule spending to land in a range spanning $17.5 billion to $xviii.5 billion, which is in line with previous guidance, while the firm'south adjusted effective taxation rate should end upwards somewhere between 23% to 25%.

My Thoughts

Why am I hither? The reasons have not changed. If at that place is a broad upgrade period where 5G technology becomes the telecom norm, Verizon will be central. I am also in AT&T (T) and Marvell Technology (MRVL) in part for this reason. (... and I don't even like AT&T.)

Verizon ended the quarter with a cash position of a cool $7 billion. That's upward significantly from a year agone, as the business firm but raised $3.five billion last month in a new debt offer. To me, that means the dividend, which is a primary reason for my being here, is probably in decent enough shape going forrard. This also ways that the house positioned itself well for the unknowable at the onset of a troubled status. For those wondering, it is likewise tardily to get in on this item quarter payout. The firm is set to make a quarterly payment of $0.615 on May 1st to shareholders of record dorsum on Apr 13th.

Interested?

My thought on this is that if one does not buy Verizon today, it probably does not go all that much farther or lower. That said, every dollar counts. Should the 200 day SMA at $57.14 not concord, the investor likely (just my opinion) gets another shot at the 50 mean solar day SMA ($55.27). That'southward where I'll add given the opportunity, merely equally I have said, I am hither for what I encounter as a relatively condom 4.3% yield in an unsafe surroundings for dividend yields.

Investors willing to await for their opportunity and looking to get paid to do so might consider selling (writing) VZ $55 puts expiring on June 19th for virtually $1.50. If that investor does get tagged, cyberspace basis on the shares would come up to $53.fifty. If not, the investor keeps the premium.

(Verizon and Marvell Engineering are holdings in Jim Cramer's Action Alerts PLUS member club. Desire to exist alerted earlier Jim Cramer buys or sells VZ or MRVL? Learn more now.)

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