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5G, Less Debt, And A Growing Yield, That's Verizon

Published Sun, 26 May 2019 22:05:51 -0400 on Seeking Alpha

Looking at Verizon (NYSE: VZ) and AT&T (NYSE: T), investors are being shown two different ways to approach the future. On the one hand, Verizon is essentially sticking to its knitting. The company isn’t involved in any huge deals, claims to not be interested in one, and is laser-focused on building out the promise of 5G. On the other hand, AT&T has transformed itself with purchases of DirecTV and Time Warner over the past many years. Though AT&T has a bigger yield and its diversity may seem appealing, there are three reasons to believe that Verizon should keep moving higher.
Less debt and more focus
One reason Verizon should keep rising is that it plans on paying down debt, while building its 5G capabilities. The company made its dual focus very clear during the last conference call. CEO Hans Vestberg mentioned 5G Mobile, 5G Home, and 5G phones as expected for this year and next. The company’s CFO Matt Ellis talked about Verizon’s plans for debt retirement. He noted that in Q1 2018, the company’s EBITDA was 2.4 times. One year later, Verizon’s EBITDA is down to 2.1, and the goal is 1.75 to 2. Just to put numbers to this metric, in the most recent quarter, the company’s net long-term debt was $111 billion, which was down nearly 4% from last year.
AT&T is on a similar path of debt reduction. The company took on billions in debt to acquire Time Warner. What should surprise investors was a comment made by the company’s CEO, Randall Stephenson, on... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
AT&T 38.38   16.1 2.38 2.04 5.43

AT&T - T
AT&T - T  

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