Morningstar Rating

Stock Research and Analysis

by Michael Hodel, CFA

Bulls Say

Verizon Wireless is the clear leader in the industry, with 105 million retail customers and coverage of more than 95% of the U.S. population. The firm's customers remain the most loyal in the business.
Among the traditional phone companies, Verizon has the best strategy for the long-term future of its fixed-line business. Its FiOS network enables unparalleled data speeds.
Acquiring 100% of Verizon Wireless should enable Verizon to better create packages of services aimed larger business customers with locations across the U.S. Read more 

Bears Say

Verizon Wireless is performing well, but the cost of maintaining network quality is high. Wireless capital spending has been running at nearly $9 billion annually recently, or about 13% of services revenue.
Verizon Wireless will need all the spectrum it holds and more to meet data growth. Spending on spectrum will hurt returns on capital.
Customers are increasingly replacing their traditional phone lines with wireless and data services or switching to competing carriers. Verizon's ability to extract high margins through its phone network is declining. Read more 

Management

We rate Verizon's stewardship as standard on the whole and relative to peers. The firm has taken steps during the last few years to address some of our concerns about compensation. The board has done a good job of presenting the measures used to determine   Read more 

Profile

Verizon is the incumbent local phone company, serving 25% of the U.S. population, and it owns a long-haul network that reaches cities around the world. Verizon Wireless,  Read more 

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