Verizon (VZ) Upcoming Catalysts

Upcoming Catalysts Verizon has finalized a deal to purchase the 45% stake held by Vodafone in its wireless business. The deal was unanimously approved by the board of both companies, and has received a nod from the Department of Justice. It is expected to be finalized in the first quarter of 2014. Verizon obtained financing for the acquisition of Vodafone's stake through the largest bond issue in corporate America. The $49 billion offered was oversubscribed by almost two times. The company will pay a total of $130 billion when the deal is closed, and make a onetime adjustment of $0.10 per share for the company's earnings in the first quarter of fiscal year 2014. Verizon recently scrapped its plans to enter the Canadian market after stepping away from a potential acquisition of WIND Mobile. Nonetheless, the company has kept the option on the table till after the January 14 auction of the 700MHZ spectrum, which it wants to participate in in order to expand its network. Verizon stock has yielded average returns of 5.2% over the past five years. The company paid $0.53 per share in dividends last quarter, and is expected to pay the same for the next. The management has also assured investors of continued dividend payments even as it undertakes one of the largest debt options for the Vodafone deal. Continued growth in data ARPUS and increasing adoption of smart devices should result in higher revenues for the company. However, data ARPU will yield lower margins for the company, since data packages are comparably cheaper than voice packages. The company is at risk in terms of organic growth in its wireless segment. The US market is extremely saturated and competitive, and while services like Verizon FIOS are showing promise in the wireline business, the rest of the segment is lacking a pure catalyst. BIDNESS SOURCES: Company Data, SEC filings, Bloomberg Professional Services Etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc.