Verizon (VZ) was in the news today for raising its dividend from $0.48 to $0.50 per quarter. http://www.reuters.com/finance/stocks/VZ/key-developments/article/2394529 . Is Verizon a buy at $36.17 given its dividend increase?
Verizon (VZ)
Market price: $36.17
Market cap: $102.38 billion
Dividend record: VZ has been paying dividends for over a decade. There are some gaps and some cuts.
Dividend: $0.50 quarterly (raised from $0.48 last quarter)
Dividend yield: 5.5% ($2.00 annual dividend / $36.17 price)
Dividend payout ratio: 89% (if you use the $2.00 dividend / $2.24 TTMs EPS), 116% (if you use $2.00 / $1.72 five year avg. EPS)
Earning power: $1.72 @ 2.833 billion shares
EPS Net inc. Adj. EPS Shares
2006 $2.12 $6,197 M $2.19 2.938 B
2007 $1.90 $5,521 M $1.95 2.902 B
2008 $2.26 $6,428 M $2.27 2.850 B
2009 $1.29 $3,651 M $1.29 2.841 B
2010 $0.90 $2,549 M $0.90 2.833 B
Five year average adjusted EPS = $1.72
Consider buying at or below $20.64 (12 times average earnings). This price was last seen in November 2009.
Consider selling at or above $34.40 (20 times average earnings)
It is selling time because Verizon is trading at 21 times average earnings. This is speculative.
Balance sheet: down slightly and stagnant; not strong.
Book value: $13.61 per share
Price to book value: 2.66 ($36.17 price / $13.61 BV). This is good.
Current ratio: 0.82 (latest quarter; over 2.0 is good)
Quick ratio: 0.67 (latest quarter; over 1.0 is good)
Disclosure: I don’t own Verizon (VZ)
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