Verizon Communications (NYSE: VZ) shares have found strong support above the $56 level, but the price is still unable to stabilize above $60 resistance. This company has a positive risk/reward profile, and Verizon shares are the right choice for any investor seeking secure dividend income.
Fundamental analysis: Verizon has paid more than $29B dividends to its shareholders in the last three yearsVerizon Communications is an American multinational telecommunication company that offers communications, information, and entertainment products and services. This is a stable company with a good position on the market, and Verizon shares are a good choice for any investor seeking secure dividend income.
The dividend payout ratio has increased from 61.5% to 68.5% over the last several years, and at the current share price, the dividend yield is around 4%. Despite the challenging pandemic environment, the dividend remains safe, and it could be even bigger in the future.
Shares of Verizon could be a good investment option, and most financial analysts are expecting its price to rise considerably in the next several years. Verizon has paid more than $29B dividends to its shareholders in the last three years, and the technical picture implies that the share price may stabilize above $60 by the end of December.
Verizon reported Q3 results at the end of October; total revenue has decreased by 4.1% Y/Y to $31.5B while Q3 GAAP EPS was $1.05. Total revenue has decreased above the expectations (-$100M), but the company raised its FY 2020 outlook.
Verizon operates six 5G Labs in the U.S. and one in London, and according to the latest news, the company has lit up 5G Ultra Wideband service at SAP Labs in Palo Alto to build 5G solutions. The company has also launched new wireless plans for small businesses starting from $30 per line with “unlimited” 4G LTE data.
“We have quickly moved from proof of concept to commercial availability and now scalability for our enterprise customers. The unprecedented performance of 5G Ultra Wideband is not just an investment for growth; it is a critical step in our customers’ digital transformation,” said Verizon Business CEO Tami Erwin.
This company has a positive risk/reward profile, and some analysts even say that the current valuation is at a “historic” discount to market. J.P. Morgan increased its price target to $61, while Guggenheim reiterated its “buy “rating with a price target at $66 (implying 10% upside).
Technical analysis: $60 represents the first resistance level
Data source: tradingview.com When we look at the chart above ( one year period), we can see that this stock price has weakened from $62 below $50, and the current price stands around$59. The important support levels are $56 and $54; $60 and $62 represent the resistance levels.
If the price falls in the upcoming period, every price in a range from $50 – $55 could be a good opportunity to invest in Verizon Communications shares. On the other side, if the price jumps above the $60 resistance level, the next target could be around $62.
SummaryVerizon Communications has a positive risk/reward profile, and this stock represents a very good opportunity for any investor seeking secure dividend income. The technical picture implies that the share price may stabilize above $60 by the end of December. Still, if the price falls in the upcoming weeks, every price in a range from $50 – $55 could be a good opportunity to invest in Verizon Communications shares.
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