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Verizon Communications, 5.9% 15 Feb 2054 (VZA)

Company Dividend Discount ModelIndustry: Telecommunications ServicesSector: Communication Services

Valuation Snapshot

Stable Growth$30.73 - $46.97$38.32
Multi-Stage$43.97 - $48.14$46.02
Blended Fair Value$42.17
Current Price$25.55
Upside65.05%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.35%3.73%1.651.611.581.531.501.471.431.391.361.25
YoY Growth--2.03%2.04%3.45%2.08%2.16%2.50%3.17%2.27%8.48%9.42%
Dividend Yield--6.44%6.31%6.19%5.98%5.86%5.74%5.60%5.24%5.13%4.62%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)22,885.00
(-) Cash Dividends Paid (M)11,419.00
(=) Cash Retained (M)11,466.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)4,577.002,860.631,716.38
Cash Retained (M)11,466.0011,466.0011,466.00
(-) Cash Required (M)-4,577.00-2,860.63-1,716.38
(=) Excess Retained (M)6,889.008,605.389,749.63
(/) Shares Outstanding (M)6,834.246,834.246,834.24
(=) Excess Retained per Share1.011.261.43
LTM Dividend per Share1.671.671.67
(+) Excess Retained per Share1.011.261.43
(=) Adjusted Dividend2.682.933.10
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.35%1.35%2.35%
Fair Value$30.73$38.32$46.97
Upside / Downside20.26%49.99%83.85%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)22,885.0023,193.7423,506.6423,823.7624,145.1624,470.9025,205.02
Payout Ratio49.90%57.92%65.94%73.96%81.98%90.00%92.50%
Projected Dividends (M)11,419.0013,433.3115,499.9017,619.8019,794.0722,023.8123,314.65

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.35%1.35%2.35%
Year 1 PV (M)12,191.5812,313.0712,434.56
Year 2 PV (M)12,766.8113,022.5313,280.78
Year 3 PV (M)13,171.3813,569.0813,974.71
Year 4 PV (M)13,428.9613,972.3014,531.97
Year 5 PV (M)13,560.5214,249.7914,966.80
PV of Terminal Value (M)235,410.25247,375.93259,823.31
Equity Value (M)300,529.50314,502.70329,012.14
Shares Outstanding (M)6,834.246,834.246,834.24
Fair Value$43.97$46.02$48.14
Upside / Downside72.11%80.11%88.42%

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