Before adding or removing an investment from your portfolio it is important to cross-check its past performance. The practice of analyzing how good a stock has done in the past and how it is estimated to perform in the future is known as portfolio analysis. If Verizon is one of the stocks in your portfolio, or a stock that you intend to add to your portfolio, here is a brief study about the recent performance of the stock.
Why investing in Verizon is a good decision?
For the past 6 financial years, Verizon has been posting annual results with steadily increasing profits. The company has been successful in maintaining its market position and competitiveness without the slightest shortfall. Moreover, Verizon has also diversified its business from core activity of telecommunications to TV services and allied industries. The diversification gives Verizon stocks much insulation from the unexpected shocks that stock markets experience once in a while. From an investor’s point of view, it poses as a safe bet and a haven for marginal returns.
Pros from the perspective of an investor
An investor is always concerned about the dividend payout that a company declares on its stocks. Also, the increase in market share as a result of increased demand for data services has also promised better profitability in the future which will translate into higher dividend payouts. Verizon’s quick response to latest technology releases like 4G and LTE has also boosted investor confidence in the company stocks. Furthermore, when its competitors were providing latest technology in telecommunications in a smaller market sphere, Verizon was covering a vast market with great profitability.
Cons of investing in Verizon
- Increasing churn rates: Churn rate is the rate at which customers migrate to competitors for services. Churn rate could be triggered by various reasons, the most common in telecommunication industry being fall in call rates, inferior service, etc.
- Increasing costs: The Company is carrying a good amount of obsolete stocks in its inventory. Since the technology for these stocks have become outdated and unusable writing them off will affect profits on a gradual basis.
The bottom line
Verizon is an appropriate investment option for investors with long-term gains in mind. The investment cannot be said to be completely safe but does provide a good amount of insulation from sudden spikes in the stock markets. With caution, it is possible to earn good returns from Verizon stocks.