Due to a CEO change VZ recently dipped. And I bought it. Here's why.
Verizon is a cash earning machine. PE under 10 on a 172B market cap. FCF was 19B in 2024 and 18.7B in 2023. That's **with** it's capex build out on 5g - which is largely done now. That's **with** it's massive debt payments. Factored in. Which brings me to VZ's weakness - and then my thesis.
Verizon's weakness is it's unholy debt. Look it up yourself for it gives me shudders to simply mention the number. Why is the share price so low for such a cash juggernaut? The debt.
Verizon also has limited growth prospects. But to compensate it has limited decline dangers. It's one of a 3 player oligopoly over American communications connectivity. And that demand be inelastic. High floor low ceiling. Who cares with it's FCF numbers. Nay - not growth not growth - but debt is what keeps the share price down.
Now about that debt.
My thesis is the dollar is in danger. Recession isn't the threat. Inflation is. So now students ...
What does inflation do to debt?
And what does it do to dollar denominated profits?
You're looking at gold in disguise. VZ