The company’s Wireline segment offers video services over its fiber-optic network; data Services comprising high-speed Internet and FiOS broadband data products, as well as local exchange capacity, managed, mobility, and security services; voice services, such as local exchange, regional, long distance, wire maintenance, and voice messaging services, as well as VoIP, and landline and wireless services; and local dial tone and broadband services to local, long distance, and other carriers. This segment also provides networking products and solutions, such as private Internet protocol services, and Ethernet access and ring services; and infrastructure and cloud services. As of June 20, 2013, it served 98.9 million retail customers. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was founded in 1983 and is based in New York, New York.”
Verizon Communications Inc: Earnings and Price Correlated Graph
Verizon Communications Inc. (NYSE:VZ) has also experienced earnings stress as the Telecommunications Services sector has evolved from wireline to wireless. However, their dividend record has shown steady, but low growth (the pink line).
Verizon Communications Inc: Capital Expenditures (capx)
Although Verizon Communications’ capital expenditures dramatically increased from fiscal 1998 to fiscal 2000, they have maintained a reasonable investment strategy in recent years. In fact, capex has shown a moderate and steady decline since fiscal 2008.
Verizon Communications Inc: Common Shares Outstanding (csho)
After following suit with their peers, Verizon Communications dramatically increased their share count in fiscal 2000. However, Verizon Communications has maintained a consistent share count ever since.
Verizon Communications Inc: Cash Flow (cfl) and Income Before Extraordinary Items Available For Common (ibcom)
One area of concern regarding Verizon Communications has been a steady reduction in cash flow since the Great Recession of 2008. This is a metric that current and prospective shareholders would be wise to follow closely.
Telecommunications Services Aggressive
The following portfolio review provides a list of additional Telecommunications Services sectors’ candidates that prospective investors may want to look at. However, I am not sure the label “aggressive” fits any companies within this sector. Nevertheless, I provide the following candidates for further review. On the other hand, I will not feature any company from this list, and instead suggest that prospective investors might be best served by looking for Telecommunications Services companies that I covered in the conservative portfolio above.
Summary and Conclusions
My review of the Telecommunications Services sector found a group of companies that were clearly in transition. Consequently, historical results, more than any other sector thus far reviewed, offer less insight than found in other sectors. In other words, more than any other sector, the dividend growth investor looking for a growing-dividend income stream for their retirement portfolios should focus on the future prospects of this industry.
