Verizon will acquire Frontier Communications in an all-cash transaction at $38.50 per share, valuing Frontier at $20 billion with the assumption of debt. We are relieved that Verizon didn’t use its shares, which we believe are undervalued, or pay a huge premium on top of the jump in Frontier’s shares on Sept. 4. We are leaving our Verizon fair value estimate at $53.
A focus on network strength over the past 15 years has put Verizon in an enviable position. Its wireless network provides the broadest coverage in the industry, and its reputation with customers is sterling.
Wireless technology is dramatically lowering the cost to build and maintain a network. Rival carriers have rapidly deployed new spectrum and technology to add coverage and capacity. Verizon’s network leadership is a thing of the past.
|
Metric
|
VZ
|
CMCSA
|
TMUS
|
|---|---|---|---|
Price/Earnings (Normalized) | 9.68 | 9.73 | 23.44 |
Price/Book Value | 1.96 | 1.89 | 3.79 |
Price/Sales | 1.40 | 1.35 | 3.05 |
Price/Cash Flow | 4.79 | 5.89 | 8.83 |
|
Metric
|
VZ
|
CMCSA
|
TMUS
|
|---|---|---|---|
Quick Ratio | 0.46 | 0.54 | 0.64 |
Current Ratio | 0.63 | 0.66 | 0.84 |
Interest Coverage | 3.54 | 5.82 | 4.68 |
|
Metric
|
VZ
|
CMCSA
|
TMUS
|
|---|---|---|---|
Return on Assets (Normalized) | 4.55% | 6.39% | 5.18% |
Return on Equity (Normalized) | 18.30% | 20.23% | 16.86% |
Return on Invested Capital (Normalized) | 7.96% | 10.84% | 7.48% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|---|
| T-Mobile US Inc
TMUS
| Mljdyxxd | Thyqwb | $237.2 Bil | |||
| Comcast Corp Class A
CMCSA
| Ryjyqcbx | Kfltdt | $157.2 Bil | |||
| AT&T Inc
T
| Cwwkn | Crlhmk | $154.6 Bil | |||
| Deutsche Telekom AG ADR
DTEGY
| Ynscdtdvjp | Bdsfmp | $147.5 Bil | |||
| KDDI Corp ADR
KDDIY
| Nwlfzbm | Zccwvsy | $67.2 Bil | |||
| America Movil SAB de CV ADR - Series B
AMX
| Cyytwhyb | Rhhymbc | $50.4 Bil | |||
| Charter Communications Inc Class A
CHTR
| Hzqwmvm | Bxvtl | $44.9 Bil | |||
| BCE Inc
BCE
| Dmqgthbml | Qgfqgm | $32.0 Bil | |||
| Orange SA ADR
ORAN
| Mwjmtlmrl | Pqtzc | $31.7 Bil |
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United States