Verizon stock market

While already struggling to meet financial targets, Verizon faces potentially additional competition from new entrants. The wireless giant has a massive debt load that could become a problem, if operating income continues declining.

VZ - Verizon Stock quote - belucydyret.web.fc2.com

The carnage might not be over as a heavy debt load and potentially added competition looms. Is the dividend secure enough to scoop up the high-yielding Verizon at these prices?

For a while now, my investment thesis has turned negative on Verizon. The wireless giant originally soared on signs that the pricing pressures from Sprint NYSE: S and T-Mobile NASDAQ: TMUS weren't impacting quarterly results.

Now, Verizon is losing postpaid subs and competition may expand further and the digital media business has struggled to get off the ground. Signs point to Dish Networks NASDAQ: DISH working with Amazon NASDAQ: AMZN to launch a 5th wireless network while Sprint could end up teaming with a cable company. Verizon desperately needs consolidation in the industry versus expanded competition.

The problem Verizon faces is that the wireless giant took on massive debt to build out the best network, yet now Sprint, T-Mobile and possibly others can compete on price due to competitive networks without the same levels of debt.

VZ Net Financial Debt Quarterly data by YCharts. The net debt to adjusted EBITDA was only 2. Verizon Q earnings release. Where the issue will come home to roost is in the high interest expenses with rates expected to rise.

Verizon could get squeezed in the process. The massive dividend yield can go higher as it did even far after the financial crisis all the way into VZ Dividend Yield TTM data by YCharts.

The market needs to see signs of a bottoming in the cash flow scenarios that could end up in financial crisis due to the massive debt load. Avoid the stock in any scenario where the large debt load could come back to haunt the wireless giant. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article.

Stock Information | About Verizon

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Is The Beat Down Over? Summary While already struggling to meet financial targets, Verizon faces potentially additional competition from new entrants. Verizon Q earnings release Where the issue will come home to roost is in the high interest expenses with rates expected to rise.

VZ Dividend Yield TTM data by YCharts The market needs to see signs of a bottoming in the cash flow scenarios that could end up in financial crisis due to the massive debt load. Want to share your opinion on this article?

Disagree with this article? To report a factual error in this article, click here. Follow Stone Fox Capital and get email alerts. Invest alongside Stone Fox Capital. For clients, Stone Fox Capital Advisors focuses on the conservative Net Payout Yields strategy. The portfolio will focus on large caps with the highest net payout yield that combines the dividend yield and net stock buyback yield.