Recent Buy – November (Part 2)

On 6th November, I bought 140 stocks of the Verizon (VZ) at an average price of $45.48. This purchase yields about 5.19%. Verizon pays quarterly dividend of $0.59 (paid in the month of January, April, July and October). Dividends will be reinvested.

 

On 6th November, I also bought 22 stocks of the AT&T (T) at an average price of $32.79.  With this purchase, I own total of 132 stocks of AT&T.  This purchase will yields about 5.98% in annual dividends ($0.49 paid quarterly, typically in month of January, April, July and October), which will be reinvested back into the stocks automatically without any brokerage charges.

Total invested capital is $7,088.58. These purchases will increase the TDK’s annual dividend by $373.52. Dividend yield on this purchase yields 5.27%.

Recently I posted my thoughts and investing philosophy about AT&T when I first posted about my purchase of AT&T stocks. You can find the link to the post here.

Since I have discussed AT&T in my recent posts at here and here, I will mainly focus on investing reasons for Verizon only for this post.

Key Factors for Verizon:

Forward PE is at about 12 which is not too far from ttm PE, in other words, not much growth in earnings expected for 2018.

Enterprise Value to EBITDA ratio is right at 7, the same ratio for AT&T is at about 6.5.

Current Ratio for VZ is right at 1.04 and 1.20 for T.

Payout Ratio is 60% for VZ, while it is 94% for T when its compared with last year of earnings for both companies.

Total stock holder’s equity is $27 B for VZ while it’s close to almost $100 B more to $ 127 B for T. This compares to market cap of about close to $185 B and $205 B for VZ and respectively.

Average cash flow from operation alone for past three years is about $30 B for VZ and about $35 B for T.  These cash flow numbers are huge from a company of about $ 200 B in size to be able to generate 16 to 17% of cash flow from operation alone every year. Even if we compare these with enterprise value instead of  market value, these numbers are still pretty robust at about 10 to 11%. Both of these companies are Cash Cows.

From all above parameters, almost all parameters T is a better value than VZ except for the payout ratio where VZ is doing way better. If price for these telecom companies keep dropping, I will be likely be adding to my AT&T position more than VZ.

I am also looking to add some more stocks in coming days/weeks.

What are your thoughts on this purchase ? What are the stocks you are buying or looking to add ?

Close Menu