Verizon Trading forecasts and signals

Mobile operator Verizon presented financial results for the 2nd quarter of this year, which were below analysts' expectations. Total revenue amounted to $33.8 billion, unchanged from the same quarter last year. Adjusted EPS was $1.31, almost coinciding with the consensus forecast at $1.32. Adjusted EBITDA decreased by 2.6% YoY, to $11.9 billion, due to the sale of Verizon Media, higher advertising costs associated with an increase in the number of wireless network connections, lower wired revenues and inflationary cost increases. Investors expected adjusted EBITDA of $12.15 billion.The number of mobile subscribers with payment "in fact" increased by only 12 thousand against the consensus forecast of 144 thousand, which is a very weak result, especially against the background of the AT&T report. The segment of home Internet and TV services also showed results mostly worse than expected.In addition, management lowered the forecast for 2022. Adjusted EPS is now forecast in the range of $5.1-5.15 compared to the previous guidance of $5.40-5.55, the consensus forecast at $5.41 and the final value for 2021 at $5.39. Thus, management reflected expectations for a significant slowdown in the growth rate of the subscriber base, as well as growing business costs. The source of the problems is a combination of an increasingly unfavorable macroeconomic situation coupled with an organic increase in competition in the sector.Analysts reduce the target price to $47. The company's shares still look attractive to long-term dividend investors, as the dividend yield is 5.7%.The growth potential of the shares looks limited, despite the low cost multipliers by historical standards. The company remains focused on premium 5G mobile communications, but this strategy now looks vulnerable. We suspect that some consumers who are under pressure from rising costs due to inflation may have an increased desire to switch to cheaper T-Mobile or AT&T tariff plans, especially in light of the fact that the fifth-generation connection from T-Mobile is the best on the market in many ...

The market the day beforeThe session on April 22, the main American stock exchanges ended in the red zone. The S&P 500 dropped by 2.77% to 4272 points, the Dow Jones lost 2.82%, the high-tech Nasdaq adjusted by 2.55%. All eleven sectors included in the broad market index closed in the red. The outsiders due to the reaction to corporate reports were producers of raw materials (-3.73%), as well as the healthcare segment (-3.63%).Company newsKimberly-Clark (KMB: +8.1%) reported better forecasts for revenue, profit and profitability. The annual benchmark for organic revenue growth has been raised.HCA Healthcare (HCA: -21.8%) reported EBITDA worse than expected, its forecast for the year was lowered by 5%. There is more inflationary pressure on costs and the personnel situation than expected.The results of Verizon Communications (VZ: -5.7%) were at the level of expectations, but the outflow of subscribers was less than predicted, and the update rate was higher. The annual EPS and EBITDA forecast is set at the lower end of the previously set range.We expectThe market continues to react sharply to the Fed's plans to tighten monetary policy. On Friday, April 22, bonds rose in price amid discussion of the possibility of raising the rate by 75 bps at the May meeting. At the same time, the head of the regulator, Jerome Powell, continues to set investors up that the increase will be 50 bps. The president of the Federal Reserve Bank of Cleveland, Loretta Mester, supports the plans of the head of the regulator: she told CNBC that the market does not need a shock from a 75 bps rate increase in May. At the same time, Ms. Mester intends to vote for a 50 bps rate increase. at the May and several subsequent meetings. Despite some respite last week, the growth of yields in the debt market continues, as the market plays back plans for a more aggressive change in monetary policy. The investment community assumes that the rate will be raised by 50 bps in May, June, July and September, and in November and December it will be raised by 25 bps. In addition, market participants predict an increase in the ECB rate by 80 bps this year.The pressure on the stock market is also exerted by the transition of the real yield of treasuries to positive territory. Negative real yields have been a growth driver for stocks for a long time.The focus remains on the corporate reporting season, the main general theme of which was the opening of the economy. Management notes the continued strong demand and balance sheet, moderate inflation pressure on margins, as well as the strengthening of the dollar and the weakening of the yuan and yen, which puts pressure on risky assets.Trading on April 25 on the sites of Southeast Asia ended in the red. China's CSI 300 lost 4.94%, Hong Kong's Hang Seng dropped 3.73%, and Japan's Nikkei 225 lost 1.9%. EuroStoxx 50 has been declining by 2.3% since the opening of the session.Brent crude futures are quoted at $101 per barrel. Gold is trading at $1,919 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 4200-4250 points.MacrostatisticsNo important macro statistics are scheduled to be published today.Sentiment IndexThe sentiment index dropped to 42 points.Technical pictureThe S&P 500 has fallen below the support of 4,300 points and may continue to decline to March lows. RSI and MACD indicate the strength of the "bearish" trend. The nearest support for the broad market index is in the range of 4200-4250 points. If this level is overcome, the benchmark may continue its corrective movement within the descending channel.Alphabet (GOOGL) will publish its quarterly report on April 26. The general market forecast assumes an increase in the corporation's revenue by 23% YoY, to $68 billion. If the actual result coincides with the expected one, its growth will be minimal from the third quarter of 2020. Many beneficiaries of the pandemic have already noted the normalization of the dynamics of financial indicators. Alphabet's revenue in 2022 may grow by 17-18% YoY, while in 2021 it increased by 41%. The corresponding expectations have already been taken into account in the GOOGL quotes, so they do not pose a risk. Investors will pay the main attention to the income from online advertising. Snap management's comments last week indicated that the online advertising market experienced a sharp short-term slowdown at the end of February, so we believe that Alphabet's revenue will be at consensus level, although in previous quarters its growth was noticeably ahead of expectations. The dynamics of the shares will be determined by management statements based on the results of the publication, including with regard to the impact of macroeconomic factors on the business.On April 27, the report for the first quarter will be presented by PayPal Holdings Inc. (PYPL). The consensus forecast assumes revenue growth of the largest online payment system by 6.1% YoY, to $6.4 billion and a decrease in EPS by 27.8% yoy, to $0.88. The value of PYPL shares has fallen by 71% from the highs of 2021 due to a slowdown in revenue growth and a deterioration in the forecast for the expansion of the user base. In 2020 and 2021, the company's revenue increased by 21% and 18%, respectively. This year, it is projected to grow in the range of 15-17% due to the pressure on the income of the separation from eBay and high inflation, which negatively affects consumer spending. At the same time, excluding eBay sales, PayPal shows higher growth rates. The termination of cooperation with this platform will be compensated by a partnership with Amazon, which will also accelerate the monetization of the Venmo application. At the same time, the company maintains a low debt burden and increases free cash flow, which creates opportunities for long-term growth. The current PYPL P/E score has dropped to a historic low of 24x, it is noticeably lower than that of the leading companies in the sector. However, the attractiveness of PayPal shares will be determined by the pace of business growth in the face of increased competition.On April 29, one of the largest integrated oil and gas companies Chevron (CVX) will present its first quarter reports. We expect strong results due to higher prices for oil, gas and petroleum products. Chevron's revenue is expected to grow by 60% YoY and 6.3% QoQ, reaching $51 billion, and adjusted net earnings per share will rise by 280% YoY and 33.6% QoQ, to $3.42. Net debt may decrease by $1 billion. Investors will be interested in estimates of losses and the volume of asset write-offs due to military operations in Ukraine, as well as losses of the Kazakh joint venture Tengizchevroil incurred as a result of an accident at the export terminal of the Caspian Pipeline Company. In our opinion, Chevron shares are trading above fair value, so positive reporting can be used to fix ...

Verizon CommunicationsThe telecommunications company Verizon Communications refers to the enterprises of the main market of the States that pay regular dividends to their depositors. The average return on these payments is 4.8%. Now we should talk in more detail about this company and, in accordance with the results of the analysis, decide whether it is worth investing in it or not.The total value of the telecommunications industry is estimated at $1.7 trillion. This is an impressive global market in terms of reserves, a third of which is concentrated in the United States. Verizon is one of the companies controlling this market in America. Competing organizations are AT&T and T-Mobile. The three of them occupy about 99% of the telecommunications market in America.The only question that remains unclear is why, if the size of this market is so impressive, it is dominated by only three companies? The answer is simple – all three giants spend millions of dollars a year on upgrading and equipping their own networks. For example, Verizon spent about $18 billion in 2021 on investments in itself. The funds were allocated for 5G licensing, the construction of new communication towers, the laying of optical fiber, the modernization of satellites and the expansion of the company's fleet.Today, the company has a truly colossal infrastructure, and anyone who decides to compete with it would have to spend billions of dollars just to match its size, and it is unlikely to achieve such impressive performance results. Having such a form of ownership, no cataclysms in the world of economics and finance have the slightest significance for Verizon.About 5G and plansIt cannot be said that Verizon is growing like a mushroom after the rain. The company's revenue has increased by only 2% over the past decade. In the coming years, thanks to the introduction of the 5G network, the company will be able to increase this figure.This is a format that provides better data transmission than 4G. Technology is the future. Autonomous vehicles, the Internet of things, AI – all these concepts are from the sphere of 5G, well, or somewhere nearby. All this cannot become a reality without this format.In 2021, the demand for 5G has grown significantly. By the end of the 3rd quarter, more than a quarter of the enterprise's corporate clients used equipment with support for this format. The introduction of new technologies led to an increase in sales of special equipment by 34.8% compared to the 3rd quarter of 2020. More and more customers are switching to a new format, while the company's revenues are beginning to grow seriously.Not only 5G-enabled equipment, but also wireless communications in a new format are attracting more and more customer attention. Innovations allowed Verizon to earn $17.1 billion from the wireless segment alone, and in Q3 2020 this figure was at the level of $16.5 billion. According to analysts' forecasts, 5G will continue its victorious march across the planet in the next fiscal year, and the percentage of revenue from this segment will grow to 3%, and by 2024 – to 4%.Dividend benefitsVerizon is a stable and serious business that provides its depositors with reliable dividend payments on a regular basis. As a percentage, the dividend yield approached 4.93%. The company's management decided to pay dividends to its shareholders regardless of financial indicators for the past reporting period. If Ford reduced or canceled payments in 2020, Verizon also increased the amount of payments.The issuer pays and raises dividends because they can freely generate cash flow. For example, with low revenue, such as in 2020, this figure amounted to $23.6 billion, which is 32.4% more than in 2019.For the 3rd quarter of 2021, the company accumulated a cash flow of $17.3 billion.Verizon's strong financial performanceDividend payments and constant receipt of free cash flow are only a small part of a large number of strengths of this enterprise. Another predominant factor is powerful fundamental data. For example, in accordance with the results of 2021, the main financial indicators not only exceeded the previous ones, but also the reporting ones for 2019:For Q3 2021, Verizon's revenue was at the position of 99.5 billion dollars;For the same period in 2020 – 94 billion dollars;In the same time period of 2019 – 97.1 billion dollars.Such outstanding figures were obtained due to the high attractiveness of the company's developments and services for customers. And all this, despite the pandemic raging in the world.Another development factor is the transition of a huge number of enterprises around the world to remote work. This was an incentive for a serious expansion of the Verizon Fios Internet service. For the 3rd quarter of last year, the consumer revenue of this segment increased by 4%, which in monetary terms amounted to $29 billion. In the reporting period, 98 thousand consumers joined the segment on a permanent basis.The management methods of the enterprise also play an important role in obtaining regular profits. In 2020, with the outbreak of the pandemic, America went into lockdown. The corporation at this time began to actively accumulate cash. By the end of the pandemic year, the company had an impressive $22.2 billion airbag at its disposal. If we compare, in the same period of 2019, this figure was only 2.6 billion dollars.Today, the fears that the pandemic has stirred up are gradually disappearing, and the company will use the accumulated funds to pay dividends and reduce the amount of debt that grew in 2021, when the company spent part of its funds in the amount of $53 billion on modernization for the development of 5G networks.It is impossible without a drop of negativityThe only thing that confuses in all the victorious tirade that we have given above is the debt of the enterprise. For the period of the 3rd quarter of 2021, the cumulative figure was 151 billion dollars. And this indicator has grown significantly, since for the same period in 2020 it was equal to 129 billion dollars, and today it is 78 billion dollars higher than the total capital of the company. The main long-forming link in this plan is 5G communication.If debt obligations are not taken into account, the company spent almost $3 billion on interest expenses in 2021. This is 13% less than for the same period in 2020.According to the combined opinion of experts, it was this debt indicator that caused the decline in the value of the company's shares last year. However, with the end of investments in the development of 5G, the company will easily send funds from its own free cash flow to cover debts. According to forecasts, the main part of it will be closed until 2025.What to do with assets?The company is not the last link in the telecommunications business of the States. Despite a small lyrical digression about debts, it is worth saying that investors need to pay close attention to the company's assets. Free cash flow should significantly reduce debts against the background of the introduction of 5G technology, as well as significantly increase profits. Against the background of the P/E multiplier equal to 11, there is an opportunity to attract investors. Another advantage is the high dividends.Today, the company's assets are returning to growth after a prolonged correction. Buyers managed to organize a defense in the area of $50, from which the asset decisively jumped back to increase, and reached $54.6. If the price remains above the $52 level, we should expect another jump to $57. The main goal is $67.IntelThe start of the new year is a great time to look for assets that have sunk somewhat in price in the last reporting year, but have a serious potential for growth. Of such securities, Intel's assets attract special attention. Over the past few years, the company has lost a significant part of the chip market to its competitors, but, as before, controls a serious part of it. The general director of the enterprise is seriously concerned about restoring the former power of the enterprise. Let's talk further about the prospects for its development.AMD is considered a significant competitor of the company today, having managed to oust the issuer from a whole range of world markets. According to expert opinion, over the last five years, the share of the competing Intel processor market has decreased by almost 20% – from 80% to 60%. The company has seriously lost its position, but it still has 60% of the market, estimated at $425 billion. Considering that semiconductors are a master key to high technologies, the enterprise today has enough resources to maintain its own positions further, as well as to regain those lost over the years.According to Intel reports, the demand for manufactured products is still quite high, and in each of the divisions of the enterprise. The company's technologies are in demand not only in data centers, but also for autonomous transport, as well as the Internet of Things. In Q3, the issuer's revenue increased by 5% year-on-year, and the profit on the asset increased by 64%.After the publication of the quarterly report of Intel CEO, it was reported that according to their expectations, the financial performance of the company will only improve from year to year. In December last year, the issuer announced plans for a public offering of the Israeli company Mobileye, which develops driver assistance systems to reduce the risk of a collision. According to the most conservative estimates, the value of this enterprise after entering the inter-market may approach $50 billion. After the listing, the company will retain a controlling stake in assets, and the manufacturer does not plan to change anything in the structure and management.Bringing Mobileye to the interbank market is one of the steps that will bring the company closer to the leading positions. The company wants to restore leadership in the industry by 2025. To do this, another method of manufacturing chips is being introduced. The company is expanding much more slowly than the competing AMD, since all actions are carried out at the expense of its own resources, including development, production. To speed up the process, the company plans to buy a number of components from TSMC, which should stimulate active chip development.Plus, the company will spend $20 million to build new microchip manufacturing plants in Arizona. The company also plans to form a foundry-type division for closer and more profitable cooperation with enterprises engaged in the development of semiconductors, but in need of a reliable chip manufacturer.The company generates a stable cash flow. For example, in the last quarter it amounted to $17 billion. This allows the company to pay stable dividends, as well as constantly increase their size. Over the last five years, payments have increased by 32% of own cash flow. This allows you to further increase payments.The problem is still thereToday, the story of the metaverse is coming to the fore for many enterprises of the same sector. Intel has not stayed away, and also plans to join this race. However, there may also be some difficulties here, since the main competitor – Nvidia is also planning to start development in this direction. The company dominates the GPU market, which is a significant advantage for it in the field of metaverse development.Success in any case will depend on the data centers. Revenue from these segments increased by 10% last year, and the indicator was recorded only for Q3. At the same time, it was found that AMD has set a fresh record in terms of profitability in this segment. This is a direct statement that Intel may have some difficulties in this matter.Even despite all the efforts of the company's management to improve its own products, product development cycles, in particular, chips, take from 3 to 5 years. That is, in the near future, it is simply impossible to return to the Intel market as a leader.However, it is not desirable to completely exclude this situation. The company has been a leader in the industry for more than one or two years, and continues to bring impressive revenues even in this situation. Including, even more than the notorious AMD. However, investors are not sure that the issuer has gained enough power to return to service.A little bit about financial indicatorsThis area of the company is also not very happy. Over the past 3 reporting quarters of 2021, the company in general has grown by almost 1% compared to the same previous period. The issuer's net profit amounted to about $15 billion. Due to the income from capital investments and reduced tax expenses, the company managed to reduce option costs by almost $4 billion.In accordance with forecasts for the whole of 2021, lower incomes are positioned than in 2020. This indicates a weak growth in asset prices over the last reporting period. It was only 10%, while the S&P500 showed 31%. The issuer's price-to-profitability ratio is close to 10, which is seriously lower than AMD's profit multiplier = 46 and the P/E multiplier =92 for Nvidia.In line with analysts' expectations, Intel is entering another weak year, and even regardless of the rather powerful potential. Experts' forecasts say that assets will fall in price by almost 30%, and revenue will remain in its positions.It is premature to talk about the acquisition of assets at the moment. The company is currently fighting for the right to return to its former heights, and this process will take quite a lot of time. Today, the paper is effective only in the long term, because it will be in a drawdown for a long time. In a short time, it is better not to consider this asset as profitable.About reporting for the past weeksCitigroupAt the very beginning of 2021, analysts predicted quite serious growth for Citigroup. It's a pity, but the predictions were not destined to come true, because the paper went into decline. Net profit of assets for Q4 2021 decreased by 26.4% year-on-year and amounted to $3.17 billion or $1.46 per paper. Revenue in the quarter increased by 1.1% and reached $17.02. According to forecasts, this figure was at the position of $16.85 billion.Summing up the results of 2021, it should be said that the profit increased by 2 times to $22 billion. Last year, the bank paid dividends to shareholders for 56% of its own profit. Today, the company's dividend yield exceeds 3% and is considered one of the most powerful in this sector.Regardless of the positive indicator of the report, the market is again controlled by sellers. After the area of $68.5, the asset fell to the price of $64.5. New purchases can be made only after the paper rises again to the $66 mark, and then its target will be around $80.NetflixIn accordance with the reporting for the 4th quarter of 2021, the company showed rather weak results, thereby greatly annoying investors. One of the world's largest streaming services announced the expectation of a decrease in the growth rate of paid subscriptions. After the release of the report, assets began to decline sharply.The reporting period showed an increase in the number of customers by $8.28 million, in total to 221.8 million people. According to the forecasts of the company itself, the increase should be at the position of 8.5 million people. Netflix's revenue showed an increase of 16%, if we take into account last year's similar period. Net profit in Q4 increased by 12%, which in monetary terms amounted to $607 million.As before, the company is on the waiting list, and no action will be taken in the near ...

IntelIntel (INTC) started 2021 on a positive note. The news that the chip manufacturer is strengthening its position in the market has given strength to the buyers of this paper. Investor sentiment also improved after Pat Gelsinger became the new CEO in February 2021. Nevertheless, the issuer was unable to maintain positive dynamics, and by the end of the year its shares had lost all recent successes.At first glance, Intel may interest investors with its low cost. The company's shares are trading at a profit of only 10 times the forward one, and bring a forward dividend yield of 2.7%. But is the game worth the candle?The main reason why this paper is expected to decline in the coming quarters is Intel's lack of competitive advantages, which caused weak revenue growth in 2021 and a decrease in margins over the past three years.Moreover, analysts do not expect significant changes in the company's fate in the coming quarters. According to forecasts, the revenue of the chip manufacturer will remain at the same level, but the profit will decrease to $3.70 per share from $5.28.The long-term forecast is also not encouraging. And in the next 5 years, Intel's cumulative annual growth rate will be only 3%.Nevertheless, it is not worth rushing to get rid of these shares. And here's why. Firstly, Intel has a good dividend, which is 2.8%, and the payout ratio is less than 27%.The second reason to purchase the issuer's shares is their low valuation. The price-to-earnings ratio of the shares is only 9.5, and the price-to-future earnings ratio is 13.5.The third reason is that the company does not think to give up. Management is ready to increase capital expenditures in the coming years to become more competitive. The company is ready to spend from $25 to $28 billion on improvements. Of course, such investments will reduce both profit and cash flow, but if they justify themselves, then Intel may have a second wind for growth.Yes, the company is inferior at the moment to its main competitor AMD, the issuer is heavily dependent on government subsidies, and in the near future it may have to suspend the payment of dividends. Nevertheless, we would not put an end to it, and we would keep some of these shares in the portfolio.Our last review of this paper was in November 2021. We recommended to refrain from bidding on this company. As the further dynamics of the asset showed, the purchase would be in the negative. Almost immediately after the forecast, the price went down and stopped only around $48-$49. Now there is a positive trend. We expect 6% growth from current levels. There are no prerequisites for a medium-term upward movement yet.Verizon CommunicationsThe wireless market looks immeasurable, however, and it has its own boundaries and high competition. For example, the American market is divided between several companies, and Verizon Communications (VZ) is one of them. This mobile operator controls approximately 30% of the American market.Given the specifics of the industry, Verizon's growth largely depends on population growth and the lure of customers from other providers. This feature reduces the attractiveness of the paper for investors.However, this does not mean that it is not worth buying. See for yourself, RootMetrics recently awarded Verizon the 16th annual Network Experience Award. In 2021, the issuer also received the largest number of awards from JD Power for network quality, and Verizon has received awards in this area for the 27th year in a row.In 2021, the telecom operator made a number of investments worth more than $53 billion to maintain its leading position in the transition to 5G. And here Verizon spent more than AT&T and T-Mobile combined.In addition, AT&T's plans to reduce its dividend payments make Verizon a leader among dividend companies in this industry. Moreover, in 2021, the mobile operator increased payments, bringing them to $2.56 per share. By the way, Verizon raises payments for the 15th year in a row.According to the latest financial report, a decrease in interest expenses, income from non-core sources and a slowdown in the growth of operating expenses led to an increase in profits. For 9 months of 2021, the issuer's revenue amounted to slightly less than $ 100 billion, an increase of 6% compared to the same period in 2020. During the same period, net profit increased by 31% to almost $18 billion.In November, we also recommended to refrain from buying this paper. As we expected, the price growth did not last long and after testing the level of $53.90, it went down again. Market stabilization occurred only around $ 50, from which the asset bounced and quickly went up. At the time of writing the review, the paper was around $52-$53. We expect the stock to continue to grow and move towards the $58-$59 ...

The largest mobile operator Verizon (VZ) presented quarterly results above expectations and improved forecasts for 2021.Total revenue rose by 10.9% y/y to $33.8 billion, which is better than the expected value of $32.77 billion. Adjusted EPS reached $1.37, exceeding the consensus of $1.30. Adjusted EBITDA increased by 5.6% to $12.2 billion, with a forecast of $12.14 billion. Thus, at the consolidated level, the financial results were better than the expectations of the investment community.In the consumer business segment (B2C), revenue exceeded expectations and amounted to $22.80 billion against the consensus of $22.46 billion. The number of communication subscribers (with payment "on the fact") increased by 528 thousand in three months, while investors expected an increase in the subscriber base by 296 thousand. The CEO of the company explains the positive result by the fact that the spread of the 5G standard is faster than expected.Verizon continues to pursue a policy of retaining those subscribers who are ready for sufficiently high mobile communication costs. The company pays great attention to the quality of communication and user support. This approach is positively reflected in the ARPA indicator, which amounted to $142.23 against the consensus forecast of $132.86.Verizon is strategically focused on marginality, which distinguishes the company from its competitor T-Mobile, which offers more attractive tariffs to new customers and is ready to sacrifice part of the margin in order to increase the subscriber base at the fastest pace in the industry.Management has raised previously announced forecasts for the full year 2021. Adjusted EPS is now expected in the range of $5.25–5.35 compared to the previously predicted corridor of $5.00–5.15. In addition, revenue growth from the provision of wireless communication services may range from 3.5% to 4%, whereas before the revision, the company had more uncertain expectations for growth at the level of "at least 3%". The forecast for service revenue was withdrawn due to the sale of the media division, which will take place in the third quarter. Recall that the company is selling a 90 percent stake in Yahoo, AOL, TechCrunch and some other assets for $5 billion to focus on its core business in the communications segment. We believe that the annual revenue as a result of the sale will decrease by about 5%, and net profit may increase, since the Verizon Media division most likely generated a loss.Thus, the results from the main activity this time exceeded expectations. The company's long-term strategy is becoming more focused on premium 5G mobile communications, which we assess positively. The report is moderately positive, so we continue to believe that the company's shares look attractive for long-term dividend investors who value income stability. The target price on the horizon of the year is ...

The American concern Verizon operates in the segment of wireless communications and Internet access. The corporation's areas include voice communication at the local and international levels, the implementation of communication products, the provision of Internet services on fiber-optic cable, as well as TV broadcasting.The wireless segment uses one of the largest networks in the United States, which, as of 2018, included 118 million users. The concern also works with 4G and 5G. The amount of revenue from wired connections is 23%, wireless communications account for 70%, and other activities bring another 7% of revenue. The concern's clients are businesses of various sizes, retail users, large enterprises, government agencies and other institutions.The concern is the main one in the field of distribution of streaming services using broadband and mobile communications. Verizon provides consumers with premium quality and unlimited traffic, which implies free access to the streaming services Discovery+, Apple Music and Disney+. With each new user attracted, the telecommunications giant will receive a large profit, taking into account the level of demand for the company's services in the United States, it may increase several times.The concern managed to quickly overcome the financial crisis of 2008-2009, with the help of the US Central Bank, which kept the base rate at a minimum level for a long time. Verizon also got into the IBD rating, which includes the best securities with exceptional technical and fundamental indicators. Among Verizon's competitors are companies such as T-Mobile and Sprint.Verizon and 5G technologyIn the second quarter, the value of the concern's revenue amounted to $33.8 billion, which exceeds the value of $30.4 billion for the same quarter last year and $32.1 billion in 2019. The profitability of wireless services increased by 47.7% year-on-year.A positive transformation in this sector has been planned for a long time. The growth is driven by 5G technology, which opens up a new opportunity for profit. As can be seen from the latest quarterly results of the corporation, the issuer only confirms this trend.When the last update took place, about 20% of users switched to devices that support 5G. As the issuer's forecast shows, in the second half of this year, the reporting should be no worse than the previous one. In the first six months of this year, Verizon made more profit from wireless equipment than in the last two years.According to the results of the second quarter, the revenue of the wireless services sector exceeded $28 billion. After such reporting, Verizon raised expectations for the growth of total revenue for the current year from a minimum to 3.5-4%.How are things really goingAlthough the reporting was pleased with good statistics in the first half of the year, Verizon securities still began to fall. This happened against the background of a number of factors.First of all, this is due to the news that Verizon plans to conclude a deal to sell Yahoo and AOL. The concern decided to say goodbye to these resources because of the low return and unjustified hope. Recall that the issuer was going to use these platforms to get a significant share in the advertising market, but nothing happened.However, as some analysts believe, the management hastened with the decision to sell. Since the second quarter, the Verizon Media division, which includes Yahoo and AOL, finished with a profit of $2.1 billion, which is 50% higher than the value of 2020.In addition, the company has acquired new debts. Verizon has a loan in the amount of 52.9 billion, which was needed for the introduction of 5G networks. The total debt of the concern is $151.9 billion.Read more: How to invest in stocks and what you need to knowIs it worth investing in Verizon shares?It is believed that the use of 5G by the concern in the future should lead to higher revenue. The corporation is a partner of Walt Disney in the field of streaming videos. In the summer, the issuers decided to expand streaming interaction and included Hulu and ESPN+ in it. The concern is also in partnership with the Apple music service.And Discovery. This industry brings considerable revenue, Verizon can record a significant profit in the coming year.The company constantly pays dividends, as it has a free cash flow of $11.7 billion: about $5.2 billion is accounted for by incentives to shareholders. In this regard, the issuer has a special advantage, since competitors either do not pay dividends at all, or they are much lower. As of today, the yield from them is at the level of 4.5%. Verizon's payments have been growing steadily for 14 years, and it is predicted that the concern will raise them again in 2021.Some investors may be afraid of the debt burden, however, it is worth noting that the company is engaged in its reduction. In the first quarter, the company's total debt amounted to 158.5 billion, but at the end of the 2nd quarter it decreased to 151.9 billion dollars.By buying the corporation's securities, you get a good opportunity to observe the increase in Verizon's profits. 5G technology will start paying off very soon. This direction has appeared quite recently, so the concern has everything in order to gain an advantage in the market.Nevertheless, it is not worth making a purchase yet. Since November last year, the financial instrument has been in a downward trend, despite a slight pause in the fall at the beginning of the year. But the uptrend was short-lived, and after testing the $60 level, the asset began to fall again. The shares are in the $50 zone, we advise you not to take risks and postpone the purchase until a better time.Read more: What is a stock split? Why do companies split their ...