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Verizon Communications (NYSE: $VZ) Stock

Verizon Communications, Inc. (NYSE: $VZ) functions as a holding company, specializing in the delivery of communication, information, and entertainment goods and services. It was was established in 1983 and maintains its headquarters in New York, NY.

The company operates through two primary segments: the Verizon Consumer Group (Consumer) and the Verizon Business Group (Business). The Consumer segment focuses on offering wireless and wired communication services and products tailored for consumers.

On the other hand, the Business segment provides a range of services, including wireless and wired communication, video and data services, corporate networking solutions, security and managed network services, local and long-distance voice services, and network access to support the deployment of a wide array of Internet of Things (IoT) services and products.

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Verizon Stock Price Forecast 2023-2024

In 2023, Verizon’s price commenced at $29.19. Presently, Verizon is trading at $31.39, signifying an 8% increase since the start of the year. The projected Verizon price at the conclusion of 2023 stands at $32.35, representing a year-to-year change of +11%.

The expected ascent from today to the year-end is +3%. During the first half of 2024, Verizon’s price is expected to rise to $33.36. In the latter half of the year, the price is forecast to gain $3.10, closing the year at $36.46, a substantial +16% increase from the current price.

Why VZ Stock Dropped 3.3% This Month 

Verizon’s (VZ) shares experienced a decline of up to 3.3% during Friday’s trading session, reflecting the broader market’s struggle with the persistent rise in interest rates. By 3:30 p.m. ET, the shares were still down 1.1%, notably lagging behind the S&P 500, which had gained 1.3% for the day.

Verizon is grappling with the ongoing challenge of escalating interest rates, with the U.S. 10-year government bond yield climbing 6 basis points to 4.78% on the same day. This trend has been consistent not only throughout the week but also over the past year.

There are two primary reasons why interest rates hold significance for Verizon. Firstly, the company carries a substantial $182 billion debt load, necessitating eventual refinancing at rates higher than its current obligations.

Secondly, investors have access to alternative high-yield investment options. With 10-year bonds offering a 4.8% yield, investors demand a premium to assume risk with a company like Verizon. Although Verizon’s current stock yield is 8.6%, it represents only a 3.8% premium over the “risk-free” rate.

However, irrespective of shifting bond yields, Verizon now confronts operational concerns that will shape the stock’s trajectory. Investors are apprehensive about stagnant revenue and potential margin pressures, which could negatively impact cash flow. Encouragingly, the last two quarters have witnessed a notable upturn in free cash flow due to reduced investments in the 5G network and increased operational cash flow.

The upcoming release of third-quarter 2023 results, scheduled for October 24, will serve as a barometer of whether the company’s cash flow maintains its positive trend, potentially linking the stock’s performance to bond yields until that time.

Verizon increases dividend for 17th consecutive year

Verizon Communications Inc. (NYSE, Nasdaq: VZ) announced today that its Board of Directors has approved a quarterly dividend of 66.50 cents per outstanding share. This represents a 1.25 cent per share increase compared to the previous quarter.

The dividend will be paid on November 1, 2023, to Verizon shareholders who are recorded as such at the close of business on October 10, 2023.

This marks the 17th consecutive year that Verizon’s Board has endorsed a quarterly dividend hike.

Hans Vestberg, Chairman and CEO, commented, “Our consistent and disciplined approach to generating robust cash flow, operating the business, and providing top-notch service to our customers has once again enabled the Board to raise the dividend. We remain committed to delivering value to our shareholders as we execute our network-as-a-service strategy.”

Verizon currently has 4.2 billion shares of common stock in circulation, and in the first half of 2023, the company disbursed approximately $5.5 billion in cash dividend payments.

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