uploads///Telecom Market Capitalization of the Largest Global Telecom Players

How Do Verizon’s Valuation Metrics Compare to Peers?


Mar. 16 2016, Updated 3:04 p.m. ET

Verizon’s scale

In this article, we’ll look at the value proposition of Verizon (VZ) among select global telecom giants. As of March 9, 2016, Verizon is the third-largest global telecom player by market capitalization. The largest global telecommunication player by market capitalization was AT&T (T) as of the same date. China Mobile (CHL) was the second largest in terms of this metric.

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Earnings multiples of Verizon

Let’s look at Verizon’s earnings multiples and those of select global telecom players. Verizon was trading at a forward PE (price-to-earnings) multiple of ~13.1x on March 9, 2016. This metric was lower than that of AT&T at ~13.3x.

The forward PE (price-to-earnings) multiples for Orange (ORAN), Deutsche Telekom (DTEGY), and America Movil (AMX) were ~14.9x, ~18.8x, and ~12.1x, respectively, as of March 9, 2016.

Dividend yield of Verizon

Verizon’s forward dividend yield was ~4.4% as of March 9, 2016, lower than AT&T’s ~5.1%. Telefonica (TEF), Deutsche Telekom, Orange, and America Movil had dividend yields of ~7.7%, ~4%, ~3.9%, and ~2.2%, respectively, as of the same date.

Instead of getting direct exposure to Verizon’s stock, you can get diversified exposure to the telecom company by investing in the SPDR Dow Jones Industrial Average ETF (DIA). The ETF held ~1.8% in the telecom company at the end of December 2015.


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