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Good call: Verizon (VZ) shows strength

Today's Financial News - Posted October 27, 2008

Many investors are bailing out of the markets. They are missing some great opportunities. Some of the nation’s strongest companies are making positive gains and showing strength well into the future.

By Andrew Snyder

Baltimore – (TFN): Wall Street seemed a bit surprised this morning, but I certainly am not. Every time my cell phone rings, I am reminded of one of the nation’s most powerful industries… telecom.

When Verizon (NYSE:VZ) reported strong earnings this morning, I was ready for the news. Besides, I was too busy writing an $85 check to the company to be surprised it is making lots of money. After reading today’s report, it is obvious I am not the only one shelling out cash each month.

When most companies across all industries are complaining of losing customers one after the other, it is refreshing to see a company making significant customer-base gains. Verizon added over two million new customers over the quarter.

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On the nitty-gritty level, the company posted Q3 earnings of $1.67 billion, up from $1.27 billion this time last year. On a per share basis, the company met analyst expectations of $0.66.

One of the most important figures to look at when evaluating a business like Verizon’s wireless division is the amount of revenue it receives from each customer. It is the equivalent of measuring same-store sales in the retail sector. Over the last three months, wireless users paid fees 0.9% higher than a year ago. That is great news going forward.

Verizon is a strong recession-resistant company. There are two reasons. First, the company’s wireless revenues will not significantly decline anytime soon. When a person buys a wireless contract, he keeps it for a long time. As we know, many folks will skip a few meals before they cancel their tether to the world.

Also, do not forget about Verizon’s $28.1 billion buyout of Alltel. Verizon will instantly become the world’s largest wireless provider, making its competitive power even stronger.

With such a strong footprint in the wireless industry, it is not surprising to see Verizon’s share price on the rise today. Right now, shares are trading up by more than 5%, even when the majority of the market is in the red.

If you hurry, you can still buy shares of the company at hugely discounted prices. Not only will you be getting a stake in a fantastic, cement-strong company, you will also get a share of the company’s current dividend payout of over 7%.

If you are looking to get your hands on a Blue Chip at penny-stock prices, this is a good opportunity. Take a look at Verizon and see if it meets your investing criteria.

I am willing to bet you will like what you see.


Next Article: Last chance for deep discounts in Post Properties (PPS) and American Campus (ACC)

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Posted by Andrew Snyder · Filed Under US Stocks and Markets 

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