Verizon Communications recently released its second-quarter results, which showed mixed performance. While net income declined by 10% compared to the previous year and revenue slipped by 3.5%, the company’s wireless segment revenue grew by 3.8% thanks to pricing increases. Additionally, Verizon’s fixed wireless service showed significant progress and indicates room for expansion.
Verizon has been able to compete in areas dominated by regional monopoly providers of wired internet by offering high-speed 5G offerings for homes and businesses. This allows the company to make its broadband services available in areas where wired internet options are limited. As a result, Verizon expects to have between 4 million and 5 million fixed wireless subscribers by the end of 2025, up from its current base of 2.3 million.
Investors are attracted to Verizon due to its dividend, which currently yields a high 7.8%. Despite facing competition and carrying a substantial amount of debt, Verizon generates significant amounts of free cash flow that can help pay down debt while supporting its dividend. Additionally, the stock appears to be undervalued, with a forward-looking price-to-earnings ratio below its five-year average.
In conclusion, Verizon’s second-quarter results highlight the potential for growth in its fixed wireless service. With the company’s focus on expanding its broadband offerings through 5G technology, Verizon aims to capture a larger market share in the coming years.
Sources: Verizon Communications (NYSE: VZ); The Motley Fool