Today I decided to buy more shares or Verizon, I’ve always been a fan of big blue chip dividend paying companies and Verizon has been on my radar for a long time, here are the reasons why I decided to start a position with Verizon and why I believe there is a possibility for good upside with my investment.
So let’s gets started, first of all Verizon has the ticker symbol $VZ, this is a major corporation who employs thousands of people and generates revenue in the billions a year, as of today their share priced are around $57 dollars and they are paying a dividend of 4% or so.
If you look at the chart, you’ll notice that the high this year has been around $62 dollars per share, this allows for a potential upside on the stock of $5 dollars per share, not only do you have the potential for a profit in the short term, plus in the long term, you have the possibility of even more upside and receiving a good return on your investment.
Now let’s talk about 5G technology, this promised to bring blazing fast speeds to mobile users, this is huge because this will compete directly against cable companies and other Internet Service Providers or ISP’s, with faster speeds you have a possibility of increasing your service subscribers to the point where a lot of people will only use their mobile phone instead of having a computer with WIFI at home, I can see their revenue increasing which should push the stock prices even higher, as you can see, I am bullish on Verizon.
Looking at Verizon market cap, you can see just how huge this company is valued, as of today their market cap is $239 billion dollars, I am always interested in investing in large corporations with large market caps because they are usually less volatile and they provide stable share prices.
Now let’s take a look at their price to earnings ratio, if you have invested in any technology companies or telecommunications you’ll probably see just how some companies have high P/E ratios, that means that they have valuations that are too high, in $VZ case they have a PE ratio of 15. This to me is a fair valuation and I’ll be adding more shares to my position in the future at these prices.
As far as dividends goes, Verizon is currently paying a dividend of 4%, me being a dividend income investor makes it for a huge plus since I know I will continue to receive quarterly payments and I could see the increasing their dividend amounts every year, plus they have a good balance sheet so I see no issues with them paying out their investors.
Let’s take a look at the price chart for the past 5 years and see how share prices have moved, as you can see, during the last 5 years this stock has hit support of $42 dollars and resistance of around $60 dollars, this shows you what kind of stability and potential for profits you have, even though there is risk, the high dividend plus potential share prices going up gives you a good opportunity to make money on this investment. Now, as much as I would have loved to start my positions near support levels, I am going to invest at these prices and average down if the stock goes down, I always recommend to buy small amounts at a time and not enter a big positions all at once.
How Much Revenue Did Verizon Generate
Let’s talk about financials, another major reason why I invest in major corporations are profits, see when a company learns how to generate billions and billions of dollars a year, it is easier to have an idea what the future looks like for them, Verizon generated around $130 Billion Dollars in 2015, $125 in 2016 with a similar result in 2017 and in 2018 they generated over $130 billion dollars as well, this company generates big revenue and big profits making it a good company to be added to my stock portfolio.
Now, as I have mentioned before, investing in the stock market comes with risk and you always have to do your own research, never invest based on someone else’s opinion and always manage your own risk before investing your own money in these companies, in my personal opinion Verizon is worth buying.
More Reasons Why I am Buying Verizon
When it comes to investing, there are many things that you have to consider, things like earnings, growth, debt come to mind, however even though I always take a look at all of those numbers there are other things that I like to take a look when considering buying stock, for example I always take a look at people’s opinion out there, looking at their social media mentions and the ratings that the users and subscribers give to the company will give you an idea of the kind of reputation the company has, in my own research I see a lot of positive comments about their service and their prices, their customers appear to be happy with the services that Verizon provides.
Also, when I valuate a company not only do you want to take a look at their customer satisfaction but also how innovative they are, Verizon has been expanding their services and they also provide home Internet and TV for home users, their business services are also very popular and once 5G becomes mainstream I am sure their profits and revenues will increase, this is one of the reasons why I am going to be buying more VZ stock and I plan on building a portfolio which not only will provide upside on the share prices but also it will allow me to receive quarterly dividend payments.
Learn how to evaluate a stock and decide if it is not for you?
Valuating a stock can be a complicated process, there are many criteria to consider when buying or selling stocks, if you want to learn more about the process of valuating a stock I recommend that you read this book!