Is Verizon a Good Investment?

PHOTO CREDIT: Verizon

OVERVIEW

Verizon Incorporation is a company based in the United States. The company offers telecommunication services for companies and individuals across the United States. The company offers call, text, and data plans for mobile devices. In addition to this, the company also offers internet and video services for these customers as well. The company was founded in 1983.

Why You Should?

  1. Verizon is an extremely good reopening play in an investor’s portfolio. The pandemic has depressed the demand for the company’s products/services from many businesses and companies who had to close down or move operations remotely. Once this pandemic is over, this demand will start to return.
  2. Verizon will benefit from a large infrastructure bill that the Biden administration looks to pass soon. In this bill, telecommunication companies like Verizon will get some money in order to increase the access of broadband internet services to rural areas and also get money in order to build out 5G infrastructure in the United States. This will benefit the company and its investors.
  3. Verizon is quickly building 5G infrastructure across the United States. Once this hardware is built out and 5G phones become more popular in the United States, the company can start to sell more expensive and higher-margin 5G phone plans in this market. This will benefit the company and its investors.
  4. The telecommunication industry has many recurring streams of revenue as customers will continue to pay monthly fees for the services that they want. For example, phone, data, and internet bills are paid monthly and will continue to offer the company with continuous revenue streams. This will benefit the company and its investors.
  5. The company offers a wide range of products and services to its customers. From cheap prepaid phone plans to expensive internet plans for large companies, the company’s diversified product mix will help them go through times of low demand for some of its products. This lowers the risk and will benefit investors in the company.
  6. As the economy continues to modernize and as people continue to depend on internet and phone plans, the company will see more stable sales through rougher economic times as people will not cancel these services. As this happens, Verizon will be a safer investment option due to the essential nature of the services that they sell. This will benefit the company and investors.

Why You Should Not?

  1. The company faces tough competition from many companies in the saturated telecommunication industry. Some of these companies include T-Mobile, AT&T, and Comcast. This competition might hurt the company and its investors in the future.

MY OPINION

I think that Verizon is a great long-term investment due to its position as a good reopening play, positive impacts from the Biden administration, 5G infrastructure, many sources of recurring revenue streams, a wide range of products and services, as well as the essential nature of the products and services that it offers. However, tough competition might hurt the company in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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