Is Verizon Stock Worth Buying in 2021?
Verizon Communications Inc. is one of the largest telecommunications companies in the world, offering a wide range of services including wireless communications, internet services, and digital media. With a market capitalization of over $200 billion, Verizon is a major player in the industry and a popular stock among investors.
But is Verizon stock worth buying in 2021? Let’s take a closer look at the company’s financials, growth prospects, and other factors that could impact its stock price to help you make an informed decision.
Verizon’s financials are solid, with strong revenue growth and steady earnings. In 2020, the company generated $131.9 billion in revenue, up from $131.3 billion in 2019. Additionally, Verizon’s earnings per share (EPS) have been consistently positive, with an EPS of $4.90 in 2020, up from $4.71 in 2019.
The company also has a strong balance sheet, with a debt-to-equity ratio of 1.45, which is lower than the industry average. This means that Verizon has a good mix of debt and equity financing, giving it the flexibility to invest in growth initiatives and pay dividends to shareholders.
Verizon is well positioned for growth, with a number of initiatives underway to expand its business and increase its market share. For example, the company recently launched its 5G network, which is expected to drive growth in the coming years as more and more consumers adopt this technology.
In addition, Verizon is expanding its internet and media businesses, with a focus on delivering content and services to customers through its platforms. The company has also been investing in its fiber-optic network to increase its capacity and improve its speed and reliability.
These initiatives are expected to drive growth for Verizon in the long term, and the company is well positioned to benefit from the growing demand for telecommunications services and digital media.
Verizon has a solid dividend yield, which is an important factor for many income-seeking investors. The company’s current dividend yield is 4.3%, which is higher than the average dividend yield for the S&P 500. This means that investors can enjoy a steady stream of income from their Verizon stock holdings, while also benefiting from any potential stock price appreciation.
Risks and Challenges
Of course, no investment is without risks, and Verizon is no exception. One of the biggest risks facing the company is increased competition from new entrants in the telecommunications and digital media markets. Companies such as Amazon, Google, and Facebook are all investing in these areas and could pose a threat to Verizon’s market share and profitability.
In addition, the company is facing increased regulation, which could impact its ability to grow and generate profits. For example, the Federal Communications Commission (FCC) recently imposed new rules on broadband providers, which could impact Verizon’s bottom line.
Finally, the ongoing COVID-19 pandemic could also impact Verizon’s business, as consumers and businesses reduce their spending on telecommunications services and digital media. This could lead to a decline in revenue and earnings for the company, which could impact its stock price.
In conclusion, Verizon is a solid investment choice for investors looking for a well-established company with strong financials, growth prospects, and a solid dividend yield. While there are certainly risks and challenges facing the company, these are outweighed by the potential benefits of investing in Verizon stock.
So, is Verizon stock worth buying in 2021? Based on the company’s strong financials, growth prospects, and dividend yield, the answer is a resounding yes. Don’t miss out on the opportunity to invest in one of the largest and most established telecommunications companies in the world.
Invest in Verizon today and enjoy the potential benefits of long-term growth and income from your stock holdings.