AllAnalyst Report
logoMorningstarMay 11, 2021

Verizon Communications Inc.: Corporate Tax Hikes Are Very Likely to Come for U.S. Equities

Symbols
VZ
Sector(s)
Communication Services
Rating
Current Price
$56.20
Fair Value
Economic Moat
Stewardship
Summary

Verizon is now primarily a wireless business (more than 70% of revenue and nearly all operating income). It serves about 91 million postpaid and 4 million prepaid phone customers and connects another 25 million data devices, like tablets, via its nationwide network, making it the largest U.S. wireless carrier. The firm has agreed to acquire Tracfone, a wireless reseller that serves about 20 million prepaid customers in the U.S., from America Movil. Fixed-line telecom operations include local networks (12% of revenue) in the Northeast, which reach about 25 million homes and businesses, and nationwide enterprise services (10%). Verizon Media Group, the online media and advertising firm formed with the acquisitions of AOL and Yahoo, provides the remainder of revenue.

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Analyst Profile

Michael Hodel

Director
Michael Hodel, CFA, is director of communications services equity research for Morningstar Research Services, LLC, a wholly owned subsidiary of Morningstar, Inc. He covers U.S. telecom service providers and related firms, including AT&T, Verizon, and Comcast. His team covers media companies, global telecom service providers, and owners of telecom infrastructure, such as wireless towers and data centers.Hodel joined Morningstar in 1998. Prior to his current position, he spent two years as a portfolio manager for Morningstar Investment Management, LLC. Previously, he served as a technology strategist responsible for telecom research, chair of Morningstar’s Economic Moat Committee, and a senior member of Morningstar’s corporate credit ratings initiative.Hodel holds a bachelor’s degree in finance, with highest honors, from the University of Illinois at Urbana-Champaign and a master’s degree in business administration from the University of Chicago Booth School of Business. He also holds the Chartered Financial Analyst® designation.