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

Analyzing Verizon’s Value Proposition in the Global Telecom Industry



Verizon’s size among telecom majors

In the earlier parts of the series, we learned about some updates from Verizon (VZ) at the recent J.P. Morgan Global Technology, Media, and Telecom Conference. Lowell McAdam, the telecom company’s chair and CEO, participated in that conference. Now, we’ll look at Verizon’s value proposition among select global telecom titans. As of May 27, 2016, Verizon is the third-largest global telecom player by market capitalization. It’s after China Mobile (CHL) in this metric. The largest global telecom player by market capitalization was AT&T (T) as of the same date.

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Earnings multiples of Verizon

Now let’s look at Verizon’s valuation multiple and select global telecom players. Verizon was trading at a forward price-to-earnings (or PE) multiple of ~13x on May 27, 2016. This figure was lower than the comparable PE multiple for AT&T of ~13.6x.

In the global telecom market, the multiples for Telefonica (TEF), Orange (ORAN), and America Movil (AMX) were ~18x, ~18.7x, and ~11.3x, respectively, as of May 27, 2016.

Dividend yield for Verizon and select global peers

Verizon’s forward dividend yield was ~4.5% as of May 27, 2016, which was lower than AT&T’s yield of ~4.9%.

The dividend yields for global players Telefonica, Orange, and America Movil were ~8.4%, ~3.9%, and ~2.5%, respectively, as of May 27, 2016.

Instead of direct exposure to Verizon’s stock, you can consider getting diversified exposure to the company by investing in the SPDR Dow Jones Industrial Average ETF (DIA). The telecom giant made up ~2% of the ETF at the end of April 2016.


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